TOKYO: Japan’s Nikkei share average gave up early gains to trade lower on Tuesday, dragged down by losses in Nidec shares after the electric motor maker kept its annual profit outlook despite a rise in quarterly earnings.
The Nikkei had fallen 0.55% by the midday break after opening 0.51% higher.
The index fell as much as 1.4% and was on course for a fourth straight session of losses.
The broader Topix was down 0.64% at 2,224.59 after touching its lowest since June 8. Shares of Nidec tumbled 10%, with some analysts saying the unchanged profit outlook of 220 billion yen ($1.47 billion) for the year to March 2024 came short of market consensus.
Kyoto-based Nidec posted a 7.6% rise in quarterly operating profit on Monday, helped by stronger sales and a weaker yen. “Nidec’s outcome hurt investor sentiment.
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It seems to have been affected by a slowdown of the Chinese economy,“ said Shuutarou Yasuda, a market analyst at Tokai Tokyo Research Institute.
“Investors expect Nidec to boost its earnings… The currency factor is not a preferred driver for Nidec’s earnings.” Rising US Treasury yields also weighed on sentiment, strategists said.
The 10-year yield rose above 5.0% overnight to hit the July 2007 milestone.
Japan’s 10-year bond yield rose in early trade but retreated after the Bank of Japan announced an emergency bond buying.
Chip-related shares also weighed on the Nikkei, with Tokyo Electron and Advantest falling 1% and 0.56%, respectively. Bucking the trend, Uniqlo brand owner Fast Retailing rose 0.33% and technology start-up investor SoftBank Group gained 0.82%.
All but four industry sub-indexes fell, with shipping firms losing 3.16% to become the worst performer among the 33 industry groups. Airlines rose 0.97% to become the top performer.
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