Japanese shares dip on Delta variant anxiety; earnings in focus

TOKYO: Japanese shares dipped on Wednesday as concerns about the rapid spread of the Delta coronavirus variant kept investors on edge, while upbeat earnings boosted Nippon Steel and other cyclical shares.

Some of the country's top companies such as Toyota Motor , Sony, Honda Motor, and a few trading houses are due to report their results later in the day.

The Nikkei share average dipped 0.16% to 27,569.52, while the broader Topix fell 0.20% to 1,927.28.

Tokyo's Nikkei closes up more than 1.8%

Concerns about surging COVID-19 cases are mounting as the head of the Japan Medical Association called for a nationwide state of emergency.

"It's not that there is huge selling. But no one is buying. Even when a company announces strong earnings, that certainly pleases its existing investors but there's no additional buyers," said Takenori Yamamoto, portfolio manager at Norinchukin Zenkyoren Asset.

He expects more buying late in August when the government will likely focus on an economic stimulus ahead of an election that must be held by November.

Still, upbeat earnings did give a fillip to some shares.

Nippon Steel jumped 8.1% after the country's top steelmaker bumped up its net profit estimate for the current year by more than 50%, well above analysts' forecasts.

That helped to boost other steelmakers, with JFE up 3.3% and Kobe Steel gaining 1.5%.

Daikin rose 4.6% after the manufacturer of air-conditioners posted stronger-than-expected profit growth.

Z Holdings gained 6.3% after the internet service firm reported brisk growth in quarterly profit.

On the other hand, Nichirei Corp dropped 11.6% after the frozen food product firm, which had benefited from demand boost from the pandemic, reported surprisingly weak quarterly profits in the quarter.

Game companies continued to feel the pinch after China's state media article described online games as "spiritual opium".

Koei Tecmo lost 3.5% while Nexon fell 2.3%.