Japan's Nikkei posts weekly fall amid domestic election jitters

SumCo

25/10/2024 07:31

(Updates with prices as of 0600 GMT)
    By Brigid Riley
       TOKYO, Oct 25 (Reuters) - Japan's Nikkei share average
marked a second week of declines on Friday as investors weighed
the risk outlooks ahead of a domestic election that could see
the ruling party lose its majority.
    The Nikkei  .N225  closed 0.6% lower at 37,913.92, posting a
2.7% loss for the week.
    The broader Topix  .TOPX  finished down 0.7% at 2,618.32.
    The markets have been on edge as recent opinion polls
suggest voters could end the Liberal Democratic Party's over
decade-long dominance on Sunday, forcing the ruling party into
power-sharing deals that may undermine the country's leadership.
    "That's basically the scenario for 'sell Japan'," with
investors considering various scenarios on how such an outcome
could impact the fiscal and monetary policy outlook, said Naka
Matsuzawa, chief macro strategist at Nomura Securities.
    The losses were widespread as investors adjusted positions
on Friday, the last day of trading before votes are counted on
Oct. 27. Of the Nikkei's 225 constituents, 176 declined, while
only 48 advanced. One was untraded.
    All 33 industry sectors were in the red, led by the shipping
sector's  .ISHIP.T  3.6% decline.
    Wei Li, a multi-asset quant solutions portfolio manager at
BNP Paribas Asset Management, expects Japanese markets could
react positively if the LDP-Komeito coalition secured a simple
majority. Failing to do so, however, could heighten volatility. 
        "The extent of the market reaction would depend on how
far below 233 seats they fall. Losing an outright majority could
spark more severe turmoil," he said.
  
    Among major shares, chip-testing equipment maker Advantest
 6857.T  tumbled 2.9% to weigh the most on the Nikkei.
    Uniqlo parent firm Fast Retailing  9983.T  shed 0.7%,
staffing agency Recruit Holdings  6098.T  lost 2.4% and
video-game maker Konami Group  9766.T  dropped 2.8%.
        The largest percentage losses in the Nikkei were
Sumitomo Pharma  4506.T  down 6.3%, followed by shippers
Kawasaki Kisen Kaisha  9107.T  losing 4.3% and Nippon Yusen KK
 9101.T  down by 3.8%.
  

 (Reporting by Brigid Riley; Editing by Savio D'Souza and Janane
Venkatraman)
 ((brigid.riley@thomsonreuters.com;))