April 11, 2019 / 3:01 AM / 3 months ago

Nikkei edges lower in choppy trade; financials weak

* Short-term investors seen trading on futures - analysts

* Yaskawa’s earnings focused

By Ayai Tomisawa

TOKYO, April 11 (Reuters) - Japan’s Nikkei edged lower in choppy trade on Thursday, led by financial stocks as the U.S. Federal Reserve’s minutes reinforced its dovish policy stance and investors awaited industrial equipment maker Yaskawa Electric’s earnings.

Yaskawa Electric, a manufacturer with large exposure to China, usually kicks off Japanese earnings season and is scheduled to report its annual results later in the day. Yaskawa’s result is used as a lead indicator of Chinese demand and investors are monitoring whether the result will bode well for other Japanese manufactures, traders said.

The Nikkei share average dropped 0.3 percent to 21,627.8 at the midday break, after briefly moving into positive territory as short-term investors were seen buying futures when the dollar edged up to trade above 111 yen.

The Nikkei outperformed the broader Topix, which fell 0.4 percent to 1,600.60.

“Short-term investors such as hedge funds are seen trading on Nikkei futures. Only short-term investors would trade now,” said Hiroyuki Ueno, a senior strategist at Sumitomo Mitsui Trust Asset Management.

He said that with the Japanese market entering the 10-day Golden Week holiday later in the month, long-term investors would not want to take positions now.

“We have many big events such as U.S.-China trade issues and U.S.-Europe trade matters, while Trump’s tweets can be provocative during the holiday. We have earnings results too, so the Nikkei may stay in a rangebound for a while,” Ueno said.

Financial stocks lost ground, after U.S. Treasury yields weakened as tame underlying U.S. inflation data reinforced expectations that the Fed would hold interest rates steady or cut them once by the end of the year.

Mitsubishi UFJ Financial Group dropped 2.3 percent, insurers T&D Holdings declined 3.1 percent and Dai-ichi Life Holdings eased 2.3 percent.

Meanwhile, Ryohin Keikaku stumbled 13 percent after the retail company expected a 6 percent fall in its net profit for the year ending February 2020. (Editing by Sam Holmes)

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