TOKYO, Oct 16: Japanese stocks turned lower in choppy trade on Wednesday morning, as investors nervously watched developments in Washington for a deal to avert a U.S debt default ahead of Thursday’s deadline.
The market pulled back after aides said that U.S. Senate leaders are continuing to negotiate on legislation to raise the nation’s borrowing authority but a deal is not expected to be announced on Tuesday.
The benchmark Nikkei eased 0.2 percent to 14,418.10 in morning trade, not far from its two-week high of 14,510.37 touched on Tuesday.
‘With the possibility that U.S. Politicians could come to an agreement anytime soon, most investors are taking a wait-and-see stance today,’ said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.
Among the stocks on the back foot, Japan Tobacco Inc fell 3.1 percent and Panasonic Corp dropped 1.5 percent.
Index heavyweight SoftBank Corp advanced as much as 2.6 percent after the tech and telecoms group said it and part-owned subsidiary GungHo Online Entertainment Inc will buy a 51 percent stake in Finnish mobile game maker Supercell for 150 billion yen ($1.52 billion).
SoftBank was the most traded stock by turnover on the main board. Gungho soared up to 21.2 percent.
Separately, SoftBank said it was in talks to buy a stake in U.S. Wireless device distributor Brightstar Corp that media reported could be worth more than $1 billion and boost its bargaining power with hardware suppliers.
The broader Topix shed 0.2 percent to 1,194.64 by the midday break in light trade, with volume at only 35.7 percent of its full daily average for the past 90 trading days. ($1 = 98.5950 Japanese yen)
The benchmark Nikkei has climbed 4.3 percent over the past five sessions. It is up 39 percent this year, buoyed by the Japanese government’s aggressive stimulus measures aimed at reviving the economy and end years of deflation.
Kyoya Okazawa, head of global equities and commodity derivatives at BNP Paribas in Tokyo, said the Japanese market is also being supported by optimism over Prime Minister Shinzo Abe’s policies to boost the economy.
‘Japanese shares looked rather resilient even when they were in correction-mode (earlier this month) on worries about the U.S. Fiscal debt ceiling issue,’ he said.
Abe, who came to power in December, has overseen a massive campaign of fiscal and monetary stimulus which has seen an euphoric rise in stocks and driven the yen lower. (AGENCIES)
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