TOKYO: Japan’s Nikkei share average erased early gains on Tuesday to end slightly lower, as investors returning from a long holiday weekend shifted their focus to trade talks from the ruling coalition’s election defeat.
The Nikkei closed 0.11% lower at 39,774.92. The index rose 1.15% earlier in the session to cross the 40,000 level.
“The Nikkei jumped earlier in the session because investors who shorted stocks immediately bought them back. They initially thought equities would tank in reaction to the election outcome,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
Japan’s ruling coalition lost control of the upper house in an election on Sunday, further weakening Prime Minister Shigeru Ishiba’s grip on power even as he vowed to remain party leader.
The election was closely monitored as Ishiba’s party also lost control of the more powerful lower house in elections last year and his Liberal Democratic Party was facing calls from opposition parties for tax cuts.
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