Nikkei little changed as virus fears counter boost from softer yen

TOKYO, Feb 21 (Reuters) - Japanese shares were little
changed on Friday as mounting coronavirus cases in China and
other Asian countries offset the boost from a weaker yen ahead
of a long weekend.
By midday, the Nikkei share average .N225 was down 0.28%
at 23,413.81, while the broader Topix .TOPX gained 0.06% to
1,675.41. On the week, the Nikkei was down 1.2% and the Topix
dropped 1.6%.
That compared with a fall of 0.2% in U.S. S&P500 .SPX and
a 0.1% drop in FTSEurofirst .FTEU3 , as of Thursday.
"Japan stock ETFs have seen outflows of funds. At the
moment, investors favour U.S. and European stocks among the
developed markets," said Takeo Kamai, head of execution at CLSA.
The outbreak has already disrupted economic growth in China
and a further spread to other countries could derail a "highly
fragile" projected recovery in the global economy in 2020, the
International Monetary Fund warned on Wednesday. The epidemic that originated in China appears to be quickly
spreading to surrounding countries such as Japan and South
Korea, even though recent tallies from China have raised hopes
of some stabilisation there. Railway operators .IRAIL.T were among the worst-hit
sectors this week, falling as much as 3.3%, while airline
companies .IAIRL.T dropped 3.4%.
The worst weekly performer was steelmakers .ISTEL.T , hit
by a surprise decision from industry leader Nippon Steel
5401.T late last week that it will slash its production
capacity by nearly 10%. Kobe Steel 5406.T hit a 17-year trough on Friday,
following Nippon Steel, which hit similar lows earlier this
week.
As more people start to avoid crowds, Tokyo Disney Resort
operator Oriental Land Corp 4661.T lost 2.6%.
On the other hand, internet firms gained as the epidemic is
prompting many conferences and seminars to be held online.
Z Holdings 4689.T rose 4.3%, while Rakuten 4755.T also
gained 4.3%.
The yen's fall, however, helped to lift exporters such as
automakers. Toyota Motor 7203.T rose 0.9%, while Honda Motor
7267.T gained 0.4%. Transport equipment index .ITEQP.T added
0.6%.
The yen was headed for its worst week in two-and-a-half
years, as worries about the coronavirus' spread in South Korea,
Japan and Beijing drove funds from Asia to the towering U.S.
dollar. Trading was slow ahead of a long weekend in Japan as the
country gears up to celebrate the birthday of their new emperor
on Monday.