Nikkei falls in thin holiday trade as weak yen trend pauses

TOKYO : Japan’s Nikkei share average edged down on Monday morning led by falls in banking and exporter stocks with risk appetite sapped by a pause in the yen’s recent tendency to weaken.The Nikkei dropped 0.2 percent to 19,395.99 in midmorning trade, with activity will likely to stay subdued in thin trade. Markets in Japan were closed on Friday for a national holiday. Japanese stocks are expected to hover the current level in thin trade this week, traders said. They noted the Nikkei was poised to end in positive territory for the year, posting its fifth straight year of annual gains.

“Japanese shares will likely stay resilient for the rest of the year. As soon as next year starts, market attention will shift to such events as U.S. jobs data,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities.

The benchmark index so far has risen 2 percent for the year. Japanese equity markets have surged in the four years since Prime Minister Shinzo Abe took office, with the Nikkei hitting an almost two-decade high in June 2015, on hopes his Abenomics policies of monetary stimulus, fiscal expansion and structural reforms would end decades of deflation and stagnation.

Attention has shifted to U.S. politics and economic potential after Donald Trump surprisingly won the U.S. presidential election last month.

Japanese equities have been underpinned by the yen’s weakness against the dollar on expectations that the incoming administration would boost economic growth and inflation via increased infrastructure spending, tax cuts and reduced regulation.

Exporters languished on Monday, with Toyota Motor Corp falling 1.5 percent, Honda Motor Co shedding 1.8 percent and Panasonic Corp dropping 1.0 percent, after the dollar lost 0.2 percent to 117.300 yen.

Banking stocks also stumbled, with Mitsubishi UFJ Financial Group falling 1.5 percent and Mizuho Financial Group down 1.2 percent. Bucking the trend, Nintendo Co jumped 4.6 percent after the Nikkei newspaper reported that Nintendo plans to put out about three new smartphone games a year in the next fiscal year and beyond.

The broader Topix dropped 0.3 percent to 1,539.22 and the JPX-Nikkei Index 400 fell 0.4 percent to 13,792.05.