Nikkei eases as investors await Greek vote, Fed

TOKYO, June 14: Japan’s Nikkei share average sagged on Thursday after U.S. Retail data disappointed and investors stayed cautious ahead of a weekend Greek election that could alter the fate of the euro zone, as well as a Federal Reserve meeting next week.
The Nikkei dipped 0.6 percent to 8,536.37 after a Spanish bank bailout deal failed to dispel concern about a euro zone debt crisis that could escalate if anti-bailout parties win a majority in Greece this weekend, potentially setting the country on the rocky path to a euro zone exit.
‘The Nikkei is obviously moving up and down but it lacks the conviction for either a rally or a sell-off,’ said Makoto Kikuchi, CEO of Myojo Asset Management Japan. ‘It would be better if everyone was just waiting for the Greek election but investors are also hanging on for the FOMC before they make a move.’
Renesas Electronics Corp soared 17.8 percent to 324 yen after the Mainichi newspaper said the money-losing chipmaker would receive a total 50 billion yen ($630 million) in loans from banks, after its main shareholders balked at a request to inject fresh capital.
The banking sector outperformed, putting on 0.7 percent to track gains in its U.S. Counterparts after JPMorgan Chase & Co rose following Chief Executive Jamie Dimon’s testimony about a multibillion-dollar trading loss.
Nomura Holdings gained 2.3 percent, while Sumitomo Mitsui Financial Group Inc rose 1.6 percent.
Consumer electronics companies, which had taken a beating over the last month on poor earnings, also bucked the market fall. Sharp Corp, Sony Corp and Panasonic Corp rose between 1.2 and 1.6 percent.
However, risk sentiment was chilled after U.S. Retail sales fell to a two-year low in May, the latest indicator of a stuttering recovery in the world’s biggest economy.
‘It’s because of statistics like these that so much attention is focused on the FOMC meeting, to see if they will ease to boost the economy,’ said Kikuchi of Myojo Asset Management.
On Wednesday, gains in large caps with low overseas exposure drove the Nikkei higher than the broader Topix. But Thursday saw heavily weighted Fast Retailing Co Ltd fall in line with the Nikkei, dropping 0.8 percent, while industrial robot-maker Fanuc Ltd lost 1.2 percent.
‘On a technical level, the Nikkei and the Topix are caught between an upside around the 25-day moving average and a downside of the five-day moving average,’ said Hiroichi Nishi, equity general manager at SMBC Nikko Securities. The Nikkei’s 25-day moving average is around 8,625, while its five-day moving average stands around 8,549.
The Topix index lost 0.5 percent to 722.61 in thin volume, a theme for the week as liquidity has also ebbed and midterm investors stepped out of the game to await next week’s pivotal events.
Also on the agenda is a Bank of Japan policy meeting that concludes on Friday, but many expect the bank will hold fire on further easing to await a Fed decision on further easing.
Foreign investors sold a net 158 billion yen ($2 billion) of Japanese stocks last week, the eighth straight week of net selling, Ministry of Finance data showed on Thursday. Amid uncertainty about a global slowdown, foreign investors emerged as net buyers of safe-haven bonds instead.


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