January 31, 2017 / 2:58 AM / in a year

Nikkei falls over 1 pct as US rally falters, BOJ decision awaited

* Wall Street mark biggest fall this year on immigration curbs

* Recently stronger yen undermines Japanese shares

* BOJ widely expected to hold policy steady

TOKYO, Jan 31 (Reuters) - Japan’s Nikkei share average fell more than 1 percent on Tuesday, tracking Wall Street lower on concerns that U.S. President Donald Trump’s policies may prove destabilising for the rest of the world.

Traders were also reluctant to stake out fresh positions ahead of a policy decision by the Bank of Japan later in the day.

The Nikkei ended the morning down 1.3 percent at 19,110.91 points.

“The 19,000 level for the Nikkei is firmer than I thought. I expected it to fall more, but it seems to be holding for now, as investors await more earnings from companies,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo.

The recently stronger yen undermined Japanese shares, she said. The dollar was down 0.2 percent at 113.63 yen, after tumbling 1.1 percent on Monday.

The broader Topix was down 1.2 percent at 1,525.67, while the JPX-Nikkei Index 400 also shed 1.2 percent to 13,680.50.

U.S. stock indexes posted their largest drop so far this year overnight on disappointment that Trump has not yet unveiled details of his promised reflationary economic policies, which had sparked a rally after the Nov. 8 presidential elections.

Trump’s sudden imposition of new immigration curbs last week reminded investors that some of his administration’s policies will have disruptive effects, as they weighed his stimulus and deregulation pledges against his protectionist stance.

In one positive sign for Japan, government data on Tuesday showed that factory output rose for a second straight month in December and household spending fell less than expected.

The data along with a spate of other readings suggest the economy may be slowly starting to regain some traction, reinforcing views that the BOJ will keep its monetary stance unchanged on Tuesday while seeking to allay market fears of an early tapering of its massive stimulus.

Sony Corp’s shares were down 2 percent, after the company said it had booked a 112.1 billion yen ($986.97 million) impairment charge on the goodwill value of its movie segment in the quarter ended December.

Shares of NEC Corp tumbled 15.2 percent after the communications equipment maker slashed its profit outlook for the year ending March 31 as delays to projects squeezed revenue.

Mazda Motor Corp was down 3.9 percent after Nikkei reported the auto maker’s operating profit is expected to fall short of guidance for the year ending March. Mazda will report its April-December earnings on Thursday.

Reporting by Tokyo markets team; Editing by Kim Coghill

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