Tokyo stocks closed lower Friday as investors grew cautious ahead of US jobs data and a weekend Italian referendum, with the benchmark index slipping off a 2016 high. The Nikkei 225 lost 0.47 percent, or 87.04 points, to end at 18,426.08, having chalked up its highest close this year on Thursday. The broader Topix index of all first-section issues dropped 0.36 percent, or 5.29 points, to 1,477.98.
Japanese markets have rallied alongside a broader global equities boom in the wake of Donald Trump's US election victory. A sinking yen has also boosted sentiment while a deal this week that saw Opec agree on a plan to cut oil production lifted markets as crude rates soared. But many investors took their cards off the table Friday. "In the short term, there's a sense of overbuying in the market," said Yoshinori Ogawa, a senior strategist at Okasan Securities.
"With the US jobs report and the Italian vote over the weekend, it's a lot easier to see profit-taking," he told Bloomberg News. The US releases later Friday its November jobs report, which could give an indication of the Federal Reserve's plans for interest rates over the next year. On Sunday, Italy votes on constitutional reform. The result is being closely watched for its potential to topple the government with Italy's heavily indebted banks already close to peril.
In currency trading, the dollar declined to 113.92 yen Friday from 114.11 yen in New York. Tokyo stocks often react negatively to a stronger yen, which tends to dent the profitability of Japanese exporters. Sony tumbled 2.43 percent to 3,170 yen and Toyota slipped 0.40 percent to 6,680 yen. Canon rose 0.36 percent to 3,296 yen after the Nikkei business daily reported that the firm will work with Japan's state space agency on developing low-cost mini-rockets as small as telephone poles.
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