Japan's Nikkei retreats from 6-week high as investors lock in gains
Japan's Nikkei retreats from 6-week high as investors lock in gains Updates with closing prices
By Rocky Swift
TOKYO, Oct 2 (Reuters) - Japan's Nikkei 225 .N225 retreated from a 6-week high on Friday as investors locked in gains and turned cautious over the outlook for interest rates, inflation, and geopolitical risks.
The benchmark Nikkei slid 0.94% to close at 68,309.46, shaving its weekly advance to 2.9%. The broader Topix .TOPX slipped roughly 1% to 4,091.00.
US stocks ended higher overnight as Treasury yields retreated from multi-decade highs, but the overall tone remained choppy with investors focused on the Federal Reserve's rate trajectory and inflation risks.
In Japan, data showed core inflation in Tokyo accelerated in September at the fastest pace in 10 months, bolstering the case for further rate hikes. Geopolitical tensions also weighed, with the US-Iran war in the Middle East and fresh disruptions to global energy markets after China suspended oil product exports beyond Hong Kong and Macau.
After the Nikkei's 3.3% surge on Thursday, "concerns about short-term overheating are likely to lead to profit-taking," according to a note by Yuta Okamoto, an analyst at Tokai Tokyo Intelligence Laboratory.
Even so, the outlook for domestic shares remains positive, he added, bolstered by the Bank of Japan's tankan survey released on Thursday showing sentiment among large manufacturers rose for a sixth consecutive quarter.
"It appears that expectations for a rise in Japanese share prices, based on earnings prospects, remain high," Okamoto wrote.
Decliners outnumbered advancers in the Nikkei 225, with 173 stocks down and 51 rising.
The largest losers were SoftBank Group 9984.T, down 5.83%, followed by Nissan Motor 7201.T, trading 4.97% lower and marking its lowest close since February 2009, and Terumo 4543.T, which lost 4.59%.
The largest percentage gainers in the index were Resonac Holdings 4004.T, which rose 8.71%, followed by Furukawa Electric 5801.T, up 7.68%, and Baycurrent 6532.T, which gained 6.15%.
(Reporting by Rocky Swift in Tokyo; Editing by Sherry Jacob-Phillips)