Japan's Nikkei cuts some losses as investors scoop up cheap stocks

Daikin Industries

20/10/2023 04:04

TOKYO, Oct 20 (Reuters) - Japan's Nikkei share average
fell on Friday, tracking Wall Street's overnight weak finish,
but the index gave up some of its losses as investors bought
stocks on the dip. 
    The Nikkei index  .N225  had fallen 0.52% to 31,266.84 by
the midday break after opening at 0.85% lower. The index is set
to lose 3.2% for the week. 
    The broader Topix  .TOPX  was down 0.38% to 2,255.52 and on
course to post a 2.2% weekly fall.
    "The market opened lower but the Nikkei narrowed its losses
because investors bought back stocks at declines. This has been
a pattern in the recent market movements," said Jun Morita,
general manager of the research department at Chibagin Asset
Management.
     U.S. stocks ended lower overnight after U.S. Federal
Reserve Chairman Jerome Powell said that additional interest
rate hikes could be warranted in view of economic resiliency and
labor market tightness.  .N   MKTS/GLOB 
     Investors were prompted to sell Japanese stocks after the
yield on the benchmark 10-year U.S. Treasury note hit the 5%
mark for the first since July 20, 2007.
     Japan's 10-year government bond yield  JP10YTN=JBTC 
slipped slightly after the Bank of Japan announced measures to
contain yields. 
    "For a while, the U.S. Treasury yields will remain as a cue
for Japanese equities," said Masahiro Ichikawa, chief market
strategist at Sumitomo Mitsui DS Asset Management.　
    Uniqlo-brand owner Fast Retailing  9983.T  fell 1.31% to
become the biggest drag on the Nikkei. Technology start-up
investor SoftBank Group  9984.T  lost 2.74% and air-conditioning
maker Daikin Industries  6367.T  fell 1.34% 
    Bucking the trend, Daiichi Sankyo  4568.T  surged 12.91%
after the drug maker announced a $5.5 billion agreement with
Merck  MRK.N  to jointly develop its three precision cancer drug
candidates.
    The drug sector  .IPHAM.T  jumped 2.49% to become the top
performer among the 33 industry sub-indexes on the Tokyo Stock
Exchange. 
    Nishimatsuya Chain  7545.T  surged 14.58% as an activist
investor Effissimo Capital owned 5.63% stake in the children's
clothing store operator.

 (Reporting by Junko Fujita; Editing by Sohini Goswami)
 ((junko.fujita@thomsonreuters.com;))