Japanese shares track Wall Street’s declines

TOKYO: Japanese shares fell on Friday, tracking Wall Street’s declines overnight after hotter-than-expected US inflation data fuelled bets for a more hawkish Federal Reserve.

However, losses on Japan’s benchmark Nikkei share average were limited by a 5.75% surge in heavyweight Fast Retailing, owner of the Uniqlo brand, following a strong earnings report.

The Nikkei closed the day down 0.55% at 32,315.99, snapping a three-day winning run. Fast Retailing was the Nikkei’s only major winner on the day, with the next best performing stock - oil company Inpex - rising just 0.83%.

Of the Nikkei’s 225 components, only 15 were higher, with 208 falling and two flat. The broader Topix index slumped 1.44%. “It’s an environment that’s ripe for profit-taking,” said Nomura Securities strategist Maki Sawada, noting the Nikkei’s 4.8% rally of the past three days and the looming weekend. Even with Friday’s sizeable sell-off, the Nikkei still gained 4.26% for the week, snapping a three-week losing run.

Of the Tokyo Stock Exchange’s 33 industry groups, only mining, which includes energy companies, escaped losses. Textiles led declines with a 2.33% drop. Retailing lost 1.4%, despite Fast Retailing’s rally. Seven & i Holdings - the operator of the 7-Eleven convenience store chain in Japan - was a noteable loser, dropping 4.48% after releasing its own financial results.

Although profit was in line with forecasts, “the lack of a buyback was a slight disappointment,” Jefferies analyst Shunsuke Kuriyama wrote in a research note.

The biggest decliner was Sumitomo Pharma, down 6.33%. Peer Astellas Pharma lost 3.23%. Online services companies Rakuten Group and Recruit Holdings fell 4.32% and 3.5%, respectively. Automakers slid, with Nissan down 2.71% and Toyota dropping 1.92%. Nintendo declined 2.43%. Sony Group shed 1.95%.