Japan’s Nikkei falls after weak US jobs data; stronger yen weighs

TOKYO: Japan’s Nikkei share average fell on Wednesday, dragged by economic-sensitive stocks after weaker-than-expected US labour market data, while the yen’s rebound hurt sentiment.

The Nikkei was down 0.8% to 38,527.6 by the midday break.

The broader Topix fell 1.16% to 2,755.24.

“Wall Street rose overnight after the labour market data helped US Treasury yields to fall,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

“But the yen rose, which was negative for Japanese equities. The positive impact of falling Japanese government bond yields was limited in the current session.”

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Wall Street ended higher after data showed that US job openings fell to their lowest level in more than three years in April, signalling an easing in labour market tightness that supported a rate cut by the Federal Reserve this year. US Treasury yields slipped following the report.

Japanese government bond (JGB) yields tracked the declines, with the 10-year bond yield falling below 1% for the first time since May 24.

The yen rose to a three-week peak against the dollar overnight, as Bank of Japan officials warned they are keeping a close eye on the currency, and a Bloomberg report said the central bank could soon discuss reducing bond purchases.

Shipping companies lost 2.98% and energy explorers fell 2.18%.

Steel companies lost 2.17%.

The insurance sector fell 3.29%, the most among the Tokyo Stock Exchange’s 33 industry sub-indexes. Chip-equipment maker Tokyo Electron lost 2.5% to become the biggest drag on the Nikkei.

Toyota Motor lost 2.03% to become the biggest drag on the Topix.

On the flip side, the property sector rose 1.27% to become the top performer among the TSE’s industry groups. Of the 225 Nikkei components, 58 stocks rose and 166 fell, with one flat.