Wed, 25 Nov 2020

TOKYO, Oct. 22 (Xinhua) -- Tokyo stocks closed lower Thursday as the yen's strength dented investor sentiment amid ongoing uncertainty as to whether a new round of COVID-19 stimulus measures for the virus-hit U.S. economy will be enacted before the U.S. presidential election.

The 225-issue Nikkei Stock Average dropped 165.19 points, or 0.70 percent, from Wednesday to close the day at 23,474.27.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 17.81 points, or 1.09 percent, to finish at 1,619.79.

Market sentiment was dampened as the safe haven yen rose to a one-month high as investors switched out of riskier assets like stocks and into safe havens like the Japanese yen and bonds, brokers here said.

The switch out of equities was triggered by mounting concerns about stalled negotiations in the United States about a huge COVID-19 stimulus package and whether it could actually be enacted before the U.S. presidential election on Nov. 3, they added.

Market strategist also said some investors were affected by the European currency's rise against the U.S. dollar on optimism that a trade deal between Britain and the European Union would advance.

Also helping to trim losses were Japanese firms reporting solid forward guidances in a sign of their recovery from the pandemic, strategists added.

"Many data show that the global economy has been recovering, although uncertain factors such as the U.S. presidential election is weighing on it," Makoto Sengoku, a market analyst at the Tokai Tokyo Research Institute, was quoted as saying.

"Some investors were starting to turn their eyes to undervalued issues, as earnings reports were not bad," he added, with reference to some firms here reporting solid outlooks ahead of earnings season next week.

But uncertainty regarding the overall presidential election and rising cases of COVID-19 as resurgences occur in Europe and the United States kept many investors in a risk-off mood, choosing the sidelines to wait for dips, brokers said.

"There are a lot of people waiting to buy stocks on the dip," Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank, was quoted as saying.

"At the same time, the upside is limited because there is still uncertainty in the market about the election and the coronavirus," she said.

By the close of play, air transportation, pharmaceutical, and electric power and gas-oriented issues comprised those that declined the most.

Among exporters losing ground on the yen's strength, Toyota Motor Co. skidded down 0.6 percent, while Honda Motor reversed 1.9 percent. Sony Corp., meanwhile, ended the day almost 1.0 percent lower.

Transportation issues came under heavy selling pressure, with ANA Holdings diving 4.1 percent, after reports the carrier is expecting to log a record annual net loss leading to some severe cost-cutting initiatives, including getting rid of half of its 60 wide-body jets.

Japan Airlines, meanwhile, ended the day 2.2 percent lower.

As for railway operators, Central Japan Railway Co. lost 3.3 percent, while East Japan Railway Co. closed down 3.1 percent.

Issues that fell outpaced those that rose by 1,730 to 388 on the First Section, while 62 ended the day unchanged.

On the main section on Thursday, 863.17 million shares changed hands, dropping from Wednesday's volume of 943.31 million shares.

The turnover on the penultimate trading day of the week came to 1.774 trillion yen (16.938 billion U.S. dollars).

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