November 1, 2019 / 7:03 AM / 12 days ago

Nikkei slips on trade deal worry, firmer yen; Keyence, Nintendo shine

TOKYO, Nov 1 (Reuters) - Japan’s benchmark Nikkei share average fell on Friday as fresh concerns over the prospects for a U.S.-China trade deal lifted the safe-haven yen against the dollar, hitting exporters and other cyclical stocks.

The Nikkei average closed down 0.3% at 22,850.77, after falling to as low as 22,705.60, its lowest since Oct. 24.

For the week, the index eked out a 0.2% gain, to mark its fourth consecutive weekly rise. The broader Topix ended flat at 1,666.50.

Chinese officials doubt a comprehensive long-term trade deal with Washington and U.S. President Donald Trump is possible, Bloomberg reported on Thursday, citing unnamed sources.

The latest blow to hopes the world’s two largest economies will reach a deal to end their trade war comes despite comments from Trump that the countries would soon announce a new site for the signing of a “Phase One” deal, after Chile cancelled a planned APEC summit set for mid-November.

The dollar hit a three-week low of 107.92 yen overnight after the emergence of the renewed doubts on a resolution of the trade war rattled the greenback and pushed global stock markets lower.

As a strong yen cuts Japanese manufacturers’ profits made abroad when repatriated, export-oriented companies and cyclical sectors came under pressure on Friday.

Optical equipment maker Olympus shed 2.8%, while robot maker Fanuc fell 1.9% and electronics maker Toshiba dropped 1.8%.

The mid-year earnings season is now in full swing in Japan.

Factory automation equipment maker Keyence soared 8.2% to hit an all-time high, becoming the fourth largest firm by market cap on the main board by overtaking Sony and SoftBank Group on Friday.

Keyence announced a stock split plan and an annual dividend forecast along with its April-September results after the market close on Thursday.

“Although the earnings results were not strong, the stock split announcement came as a big positive surprise. The stock will become more accessible for retail investors,” said Yasuo Sakuma, chief investment officer at Libra Investments.

Nintendo jumped 7.5% to become the most traded stocks on the Topix after the gaming company’s operating profit for the July-September quarter more than doubled, blowing past analyst estimates, on strong demand for its Switch console.

Murata Manufacturing climbed 3.2% after the electronics component firm raised its full-year operating profit forecast, citing a greater proportion of high-end products and cost reduction.

Sumitomo Corp dived 5.6% after the trading house lowered its full-year profit forecast and dividend forecast. (Reporting by Tomo Uetake; Editing by Himani Sarkar)

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