Japan : Nikkei wavers as yen’s retreat halts, focus on US jobs report

TOKYO : Japan’s Nikkei share average treaded water on Tuesday, with momentum from the previous day’s rally stalling as the yen’s extensive retreat halted for the time being.The Nikkei was effectively unchanged at 16,740.42 points after dipping to 16,677.85 earlier.

It has surged 2.3 percent on Monday as the yen plunged against the dollar following hawkish-sounding comments from Federal Reserve Chair Janet Yellen over the weekend which has revived expectations of an interest rate hike this year.

The markets’ focus has now shifted to Friday’s U.S. non-farm payrolls report and its impact on Fed policy, currencies and Wall Street shares.

“A strong jobs report would take the yen down further and bode well for the equity market. The key is how U.S. shares react to a strong report. If they come out relatively unscathed, the Nikkei could test fresh highs,” said Masahiro Ichikawa, a senior strategist at Sumitomo Mitsui Asset Management.

Tokyo’s banking and securities subindexes eked out gains following a rise by their Wall Street peers overnight, while retailers and information and communication fell to profit taking after rallying on Monday.

Seafood processor Maruha Nichiro Corp was down 1 percent as international talks began that could potentially result in tighter tuna fishing regulations.

The broader fishing and forestry subindex was down 0.5 percent.

Euglena Co Ltd, a biotech venture that manufactures food, cosmetic products and biofuel from the euglena microalgae, rose as much as 4.3 percent after the Nikkei business daily reported that its pre-tax profit for the year through September 2017 is likely to hit a record high for the third straight year.

Gunma Bank gained as much as 5.4 percent after it said it will buy back 5 million of its own shares, or 1.11 percent of its outstanding stock.

The broader Topix inched up 0.1 percent to 1,314.35 and the JPX-Nikkei Index 400 rose 0.1 percent to 11,832.20.