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Nikkei slips on virus restrictions, caution before U.S. Senate runoffs

Published 01/05/2021, 11:30 AM
© Reuters.

TOKYO, Jan 5 (Reuters) - Japanese shares edged down on
Tuesday as the local government looks set to declare a state of
emergency to deal with rising COVID-19 infections while
uncertainty about Senate runoffs in the U.S. state of Georgia
also dented investors' risk appetite.
Nikkei share average .N225 dipped 0.10% to 27,232.38 while
the broader Topix .TOPX ticked down 0.05% to 1,793.66, though
both indexes reclaimed much of early losses.
"There is little reason to buy hastily today ahead of the
runoff in Georgia," said Yuya Fukue, trader at Rheos Capital
Works.
The elections will determine who will control the Senate,
and thereby how much U.S. President-elect Joe Biden can push
through Democrats' agenda, including rewriting the tax code,
boosting stimulus and infrastructure spending. Airlines .IAIRL.T and train operators .ITEQP.T were
among worst performers in the Tokyo Stock Exchange's 33 industry
subindexes, falling 1.2% and 1% respectively, on the prospects
of fresh curbs to contain the health crisis.
Local media reported earlier in the day that Japanese Prime
Minister Yoshihide Suga told a ruling party meeting a state of
emergency declaration for Tokyo and the surrounding area would
be decided on Thursday. Tokyo Disney Resort operator Oriental Land 4661.T dropped
1.43%.
Carmakers .ITEQP.T fell 1.1% as the yen's gains against
the U.S. dollar could chip away their profit from exports.
Hino Motors 7205.T fell 2.9% while Nissan Motor 7201.T
dropped 2.2% and Subaru 7270.T shed 1.6%.
The yen hit a near-10-month high of 102.715 per dollar
JPY= on Monday.
On the other hand, many momentum shares, or those that have
performed well in recent months, continued to rally.
Tokyo Electron 8035.T rose 2.4% while Murata Manufacturing
6981.T gained 2.1% and Sysmex 6869.T gained 0.6%.

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