April 22, 2016 / 2:57 AM / 2 years ago

Nikkei edges down from 2-1/2 month high, Mitsubishi slumps

TOKYO, April 22 (Reuters) - Japanese stocks edged down on Friday morning, retreating from the previous session’s 2-1/2 month high when risk appetite was curbed by a dip in oil prices and disappointing U.S. corporate earnings that threatened to dim the global outlook.

The Nikkei share average edged down 0.1 percent to 17,347.36, putting it on track to end the week about 3 percent higher.

“The U.S. dollar remains doggedly below 110 yen, which will cap any notions of a sustained rebound,” said Stefan Worrall, director of Japan equity sales at Credit Suisse.

“We’re unlikely to see more conviction behind further yen strength or weakness until after next week’s big Fed and Bank of Japan meetings, which means for now the market will remain influenced predominantly by micro- and near-term events, the most obvious being earnings.”

Appetite for riskier assets was sapped by disappointing quarterly corporate earnings that pushed Wall Street to its first loss in four sessions.

The yen held steady and remained on track to end the weak 0.6 percent lower against the U.S. dollar, giving Japan’s exporters some breathing room as invstors speculate about the possibility of further easing when the Bank of Japan meets next week.

Mitsubishi Motors Corp continued the steep decline that began on Wednesday afternoon, when Japan’s sixth-largest automaker said it had overstated the fuel efficiency of 625,000 cars sold in Japan.

Its stock plunged 13.2 percent to a new record low after U.S. auto safety regulators said it had asked the automaker for information on its vehicles sold in the U.S., while Japanese media reports suggested Mitsubishi may not have disclosed all of the models involved in the scandal, which threatens to wipe out 40 percent of its market value by the end of the day’s trading.

Shares of Sony Corp were 2.9 percent lower after the electronics giant cut trimmed 9.4 percent from its profit estimate for the year through March 2016, citing weaker demand for smartphones.

Sharp Corp bucked the morning’s weakness, climbing 2.9 percent after the Nikkei business daily reported the electronics company would jointly develop low-cost televisions with Foxconn in order to broaden its market share in Asia.

The broader Topix edged down 0.2 percent to end the morning session at 1,390.69 with all but 10 of its 33 subindexes in negative territory. The index remains on track to end the week more than 2 percent higher.

The JPX-Nikkei Index 400 declined 0.2 percent to 12,599.72. (Reporting by Joshua Hunt; Editing by Eric Meijer)

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