TOKYO: Japanese shares slipped on Thursday as weak US economic data stoked caution toward the outlook of the world’s largest economy, while a stronger yen hurt automakers.
At 0134 GMT, the Nikkei was down 0.1% at 37,704.91, having trimmed most of a decline of 0.6% earlier in the session.
The broader Topix was down 0.64% at 2,627.17.
Overnight, US data showed the smallest gain in private payrolls since March 2023 while the service sector contracted for the first time in about a year.
“The market had not expected to see the weak data out of the US, so now investors have become cautious about Friday’s employment report,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
“But the weak economic data means the Federal Reserve may lower interest rates, which is positive for equities.
So investors do not have to switch to risk-off mode,“ Yasuda said.
The US dollar weakened across the board overnight, sending the yen as high as 142.6.
The yen was last down 0.1% at 142.89.
A stronger Japanese currency tends to hurt shares of exporters, as it decreases the value of overseas profit in yen terms when repatriated to Japan.
Automakers fell, with Toyota Motor and Honda Motor slipping 1.87% and 1.44%, respectively.
Overall, automakers and auto parts makers fell 3.8%. Bank shares fell as US Treasury yields declined overnight, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group slipping 1.3% and 1.4%.
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Chip-related heavyweights rose to track overnight gains in the technology-heavy Nasdaq Composite.
Advantest surged 5% and Tokyo Electron rose 3.3%, providing the biggest support to the Nikkei.
Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 45% rose, 50% fell and 3% were flat.
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