Japan’s Nikkei sees biggest weekly gain in over 2 months, earnings caution weighs

TOKYO: Japan’s Nikkei on Friday posted the biggest weekly jump in more than two months, with the index recovering all of its losses since the Bank of Japan’s surprise policy tweak last month.

But, caution around domestic earnings also capped the gains. The Nikkei share average inched up 0.07% to end the session at 27,382.56, after trading in negative territory.

The index posted a 3.12% weekly gain, the biggest since the week ended Nov. 11. “Investors sold stocks after the Nikkei recovered all the declines stemmed from the Bank of Japan’s policy tweak last month,” said Jun Morita, general manager of the research department at Chibagin Asset Management.

“Also, amid the earnings season, investors are cautious about negative surprises after Nidec posted a disappointing outlook.” The BOJ’s surprise policy tweak on Dec. 20 to widen the trading band for the 10-year government bond yield had pushed the index lower.

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The Nikkei, up 4.94% so far this month, has been on an upward trend since the central bank kept its ultra-loose policy unchanged at its policy meeting last week.

Electric motor maker Nidec disappointed investors by slashing its full-year operating profit forecast by nearly half, sending the stock down as much as 7% in the following session. On Friday, Nidec jumped 3.05% and posted a 2.43% weekly gain.

Wafer maker Shin-Etsu Chemical jumped 4.09% after raising its full year profit forecast. Toyota Motor inched up 0.4% in seesaw trade after announcing that Akio Toyoda will step down as president and chief executive to become chairman from April 1, and hand over the helm of Japan’s biggest automaker to its top branding officer, Koji Sato.

The broader Topix gained 0.22% to 1,982.66 and posted a 2.9% weekly gain. Core consumer prices in Japan’s capital, a leading indicator of nationwide trends, rose 4.3% in January from a year earlier, marking the fastest annual gain in nearly 42 years. Banking sector rose 2.51% to become the top gainer among the 33 industry sub-indexes, while the shipping sector slipped 3.62% to become the worst sector.