Nikkei dips on fading U.S. rate cut views, earnings caution

Toho Co (Tokyo)

22/07/2019 07:40

* Investors look to Japan earnings season amid trade worries
    * Asahi Group Holdings down after AB InBev deal 
    * Semi-conductor shares extend gains 

    By Hideyuki Sano
    TOKYO, July 22 (Reuters) - Japanese shares dipped on Monday
as hopes for a large U.S. Federal Reserve rate cut faded and
investors took a cautious stance ahead of the domestic earnings
seasons, which starts this week.
    The Nikkei share average  .N225  fell 0.23% to 21,416.79
while the broader Topix  .TOPX  shed 0.49% to 1,556.37, with low
turnover of 1.63 trillion yen, about 30% below the annual
average.
    On Friday, U.S. stocks fell following a Wall Street Journal
report that the Federal Reserve plans to cut interest rates by
only a quarter-percentage point at the end of the month.
 urn:newsml:reuters.com:*:nL2N24K143 urn:newsml:reuters.com:*:nL4N24K3LY
    On the whole, trading was light with many investors awaiting
earnings for clues on the market, which has moved in a narrow
range in the past few months on uncertainties over Sino-U.S.
trade war.
    "Although the U.S. and China have struck a truce on trade,
the reality is that there was a tariff hike in June," said
Masahiro Ayukai, senior strategist at Mitsubishi UFJ Morgan
Stanley Securities.
    "Japan and South Korea have spats while the world's economy
is slowing down. Investors are looking to what kind of guidance
companies will provide under such circumstances," he said.
    Quarterly earnings reports by Japanese companies will be in
full swing later this week, with Canon  7751.T  and Nidec
 6594.T  announcing results after the market close on Wednesday.
    The market showed no reaction to Sunday's Japanese upper
house election, where Prime Minister Shinzo Abe's ruling bloc
won a solid majority.  urn:newsml:reuters.com:*:nL4N24M017
    The biggest movers of the day included Asahi Group Holdings
 2502.T , which fell 8.9% after the beverage firm said it would
buy the Australian operations of Anheuser-Busch InBev  ABI.BR 
and issue up to 200 billion yen ($1.9 billion) of shares to fund
it.  urn:newsml:reuters.com:*:nL8N24K1BB 
    Bucking the broader decline, chip-related stocks extended
their gains following upbeat earning guidance from Taiwan's TSMC
 2330.TW  last week.  urn:newsml:reuters.com:*:nL4N24J2G0
    Taiyo Yuden Co Ltd  6976.T  rose 3.3%, while Advantest Corp
 6857.T  rose 1.9%, and Screen Holdings  7735.T  rose 2.7%.
    Sanoh Industrial  6584.T  gained 8.4% in heavy trade, having
risen 30% since Thursday, when the company announced it
developed a battery cell that can directly convert heat into
electricity.
    

 (Editing by Richard Borsuk and Sam Holmes)
 ((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))