TOKYO: Japan’s Nikkei share average finished more than 1 percent lower on Thursday, as investors booked profits from a rally driven by expectations for fiscal dove Sanae Takaichi’s new government.
The Nikkei declined 1.35 percent to 48,641.61 in its second straight session of falls. The broader Topix edged down 0.39 percent to 3,253.78.
“Investors had scooped up stocks ahead of the parliamentary vote to elect Takaichi as prime minister, and as soon as she was elected, they started a selloff as all the good news was priced in,” said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.
Hardline conservative Takaichi was elected Japan’s first female prime minister on Tuesday, sending the Nikkei to a record intraday high of 49,945.95 on that day.
Sentiment was also hurt by concerns over the US-China relationship after reports that the Trump administration was considering curbs on exports to China made with US software.
“The news on the US-China issues became a trigger for the selloff, but it was not a fundamental reason for today’s declines,” Shimada said. Technology investor SoftBank Group lost 4.66 percent to become the biggest drag for the Nikkei. Chip-related Advantest and Tokyo Electron lost 3.71 percent and 3.25 percent, respectively.
Meanwhile, defence-related shares jumped, with Sumitomo Heavy Industries surging 11.26 percent. Kawasaki Heavy Industries and IHI rose 8.32 percent and 4.3 percent, respectively.
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