Tokyo stocks edged up Monday but a pick-up in business confidence was offset by caution after Prime Minister Shinzo Abe's ruling party suffered a huge defeat in Tokyo elections. The Bank of Japan's Tankan business survey showed confidence among the country's biggest manufacturers rose for the third straight quarter to a more than three-year high.
However, traders were spooked after Abe's Liberal Democratic Party (LDP) suffered a crushing defeat in the Tokyo assembly election, a vote seen as a barometer of public sentiment toward his government. "With the LDP losing more seats than expected in the Tokyo Metropolitan elections, investors are more likely to take on a wait-and-see mood, given its possible effects on national politics going forward," said Mitsuo Shimizu, deputy general manager at Japan Asia Securities.
However, he told Bloomberg News: "The Japanese economy's fundamentals haven't fallen apart. I don't see the market being sold off by any great degree given the selloff at the end of last week as well." Tetsufumi Yamakawa of Barclays Securities Japan said the result potentially raised serious concerns about Abe for investors.
"If his leadership continues to weaken, the markets may have to revise their assumption of Abe winning a third term as LDP president and prime minister in September 2018," Yamakawa wrote in a commentary. Tokyo's benchmark Nikkei 225 gained 0.11 percent, or 22.37 points, to 20,055.80, while the Topix index of all first-section issues rose 0.16 percent, or 2.51 points, to 1,614.41.
The Nikkei fell nearly one percent on Friday after big drops on overseas markets with technology companies taking a hit. Buying was given some support from a weaker yen, which is positive for Japanese exporters. The dollar stood at 112.60 yen, up from 112.45 yen in New York. Toyota rose 0.96 percent to 5,950 yen while Panasonic gained 0.68 percent to 1,534.5 yen.
Fast Retailing, a market heavyweight and operator of casual fashion chain Uniqlo, was up 0.05 percent at 37,440 yen. Toshiba dropped 3.42 percent to 262.5 yen after announcing plans to list Landis+Gyr on the Zurich stock exchange as part of its effort to raise much-needed cash.
Comments
Comments are closed.