Tokyo shares back to black in early trade after US gains

TOKYO: Tokyo stocks shed earlier losses and moved into positive territory in early trade Thursday, after overnight gains on Wall Street outweighed pressure from the yen's appreciation on the market.

The benchmark Nikkei 225 index started in the red but moved quickly into positive territory, gaining around 0.12 percent or 33.27 points at 26,790.67 in early trade, while the broader Topix index was up 0.09 percent or 1.64 points at 1,788.47.

The market started lower with investors wary about a higher yen. They have been looking to lock in profits after recent gains, analysts said.

The dollar stayed low at 103.46 yen, little changed from 103.43 yen in New York, and compared with 104.00 yen seen at the start of the week.

"Continued appreciation of the yen against the dollar is expected to weigh on the market," Okasan Online Securities said in a note.

"The Nikkei may also face profit taking and pressure," it said.

But the Tokyo market's overall strength is seen remaining firm, analysts said.

Solid overnight gains on Wall Street were seen providing support, Okasan added.

The Nasdaq ended 0.5 percent higher, while the S&P added 0.2 percent. The Dow however lost 0.2 percent.

Some volatility was expected, but the bourse still has more room for further gains in the future, Okasan said.

Among major shares, imaging and medical firm FujiFilm Holdings lost 3.46 percent to 5,504 yen.

The fall came after media reports said authorities were expected to rule that the firm has failed to prove the effectiveness of its flu drug favipiravir, marketed under the name "Avigan", for use in treating COVID-19 patients.

Its rival pharmaceutical firm Shionogi soared 4.69 percent to 5,694 yen after it said it was going to start a clinical trial for its coronavirus vaccine.

Toyota also rebounded from earlier losses and added 0.40 percent to 8,012 yen. Uniqlo-operator Fast Retailing fell 0.14 percent to 85,050. Sony rose 2.36 percent to 9,995.