Tokyo stocks closed flat Monday as buying prompted by strong US jobs data and a weak yen fizzled out. The Nikkei 225 index at the Tokyo Stock Exchange inched up 0.08 percent, or 15.19 points, to 17,935.64, the highest finish since July 2007. The Topix index of all first-section issues was up 0.13 percent, or 1.91 points, at 1,447.58.
The benchmark Nikkei opened higher, topping 18,000 for the first time since July 2007. The positive start came after the dollar rose past 121 yen to hit a fresh seven-year high on the strong US jobs data. But the Nikkei soon sagged. A surprise downward revision to Japan's July-September gross domestic product was somewhat off-putting, traders said. But Toshihiko Matsuno, senior strategist at SMBC Friend Securities, said the Nikkei narrowed its gains largely for technical reasons.
"The initial stock buying was more reflexive, in reaction to the dollar's rise, but I wouldn't put too much stock in a 'pall' cast by the GDP revision," Matsuno said. "There seems to be pretty strong technical resistance at the Nikkei 18,000 level, while the dollar looks increasingly overbought," he told Dow Jones Newswires. He added investors were aware that both the Bank of Japan and the government pension funds are on the lookout for buying opportunities, which limits the scale and depth of any sell-offs.
The second growth estimate from the Cabinet Office showed Japan's economy contracted 0.5 percent quarter-on-quarter in the three months to September, worse than the 0.4 percent shrinkage in a preliminary report. The dollar was at 121.47 yen in afternoon Tokyo trade, compared with 121.44 yen in New York Friday afternoon. A weak yen is positive for Japanese exporters as it makes them more competitive abroad and increases repatriated profits. Toyota rose 1.49 percent to 7,858.0 yen and Canon rose 0.26 percent to 3,910.5 yen. Sony fell 3.24 percent to 2,590.0 yen, dragged down by concerns over a brazen cyber attack on its movies business arm.
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