Japan's Nikkei eases on earnings drag, hawkish Fed

Trend Micro Incorporated

10/11/2023 06:33

By Kevin Buckland
       TOKYO, Nov 10 (Reuters) - Japan's Nikkei share average
edged lower on Friday, tracking overnight Wall Street losses
following a hawkish tilt by U.S. Federal Reserve Chair Jerome
Powell, while some heavyweight stocks including SoftBank Group
slumped after disappointing earnings.
    The Nikkei  .N225  ended the day down 0.24% at 32,568.11,
but well off lows from the morning session when the index sagged
as much as 1.22%.
    The broader Topix  .TOPX  reversed early losses to finish
0.07% higher.
    Both benchmarks gained for the week, with the Nikkei up
1.94% and the Topix rising 0.62%.
    Overnight, Powell said he and his Fed colleagues "are not
confident" that policy is yet restrictive enough to tame
inflation, helping to send the 10-year U.S. Treasury yield
 US10YT=RR  soaring as much as 13 basis points to 4.654%.
    That led the dollar to surge as high as 151.39 yen
 JPY=EBS , but without buoying the overall Japanese market.
    "There is really nothing of the 'weaker yen means buy
exporters on the boost to earnings'," said Maki Sawada, a
strategist at Nomura Securities. 
    "Instead it's the rise in U.S. yields behind the weaker yen
that's making investors nervous."
    That was clear from the underperformance in growth stocks,
with a Topix sub-index of the shares  .TOPXG  retreating 0.25%,
while a sub-index of value shares  .TOPXV  gained 0.38%.
    Startup investor SoftBank Group  9984.T  slumped 8.17%,
making it the Nikkei's biggest drag. 
    Nissan  7201.T  and Honda  7267.T  were other notable
decliners, both falling more than 4%.
    Financial results created a yawning gap between the biggest
winners and losers in the session, with engineering company JGC
 1963.T  and camera maker Nikon  7731.T  each tumbling in excess
of 10%, while PC security company Trend Micro  4704.T  surged
13.52% and chemical company Resonac  4004.T  soared 10.47%.
    Japanese earnings season reaches a crescendo on Friday, with
about 650 companies reporting, including chip-making equipment
giant Tokyo Electron  8035.T , before mostly coming to an end on
Tuesday of next week.

 (Reporting by Kevin Buckland; Editing by Rashmi Aich and
Mrigank Dhaniwala)
 ((Kevin.Buckland@thomsonreuters.com;))