Tokyo shares flat in early trade

TOKYO: Tokyo’s benchmark Nikkei index was up slightly in early trade Friday as fears receded that Russia might default on its bonds.

The Nikkei 225 index hovered in a narrow range and was up 0.01 percent or 2.63 points at 26,655.52 in early trade, while the broader Topix index added 0.31 percent or 5.93 points to 1,904.94.

The dollar was at 118.63 yen, nearly flat from 118.64 yen on Thursday in New York.

Japanese shares set for best week in nearly 22 months

The market’s risk appetite continued to grow after the Federal Reserve decided to raise interest rates, lifting the Dow to end up 1.2 percent and the Nasdaq to advance 1.3 percent.

The market cheered as it became clear that Russia had made payments on its bonds, weakening fears of a possible default.

“The importance of the payment cannot be understated as it indicates that the exceptions that were set up on the sanctions on Russia are holding and may indicate a willingness by firms to allow other transactions such as energy,” Tapas Strickland of National Australia Bank said in a note.

The move added “to a sense of hope despite the Kremlin pushing back overnight on the degree of progress in peace talks,” the note said.

The Ukraine crisis continued to weigh on the market, while investors in Tokyo were expected to square their positions ahead of a long weekend.

The Nikkei has steadily gained in recent days. “Naturally, profit-taking is expected,” Okasan Online Securities said in a note.

But caution was receding about the war in Ukraine for now.

“Since the start of March, Japanese shares have tended to drop significantly ahead of weekends because investors were cautious about the risks of the war turning worse,” Okasan said.

“With signs of progress seen in the ceasefire negotiations, moves to sell aggressively should be limited,” the brokerage said.

Among major shares, Sony Group rose 0.45 percent to 12,325 yen. SoftBank Group rose 1.07 percent to 4,836 yen.

Uniqlo-operator Fast Retailing rose 0.72 percent to 60,340 yen. Nintendo added 0.80 percent to 61,440 yen.

Mitsubishi UFJ Financial Group fell 0.32 percent to 756.7 yen. Air carrier ANA Holdings dropped 1.88 percent to 2,476.5 yen.

Toyota fell 1.13 percent to 2,013 yen after the automaker announced further reduction of production activities cause of a pandemic-linked parts shortage.