June 9, 2020 / 2:54 AM / 24 days ago

Tokyo shares off 3-1/2-month highs as firmer yen weighs on market

SYDNEY, June 9 (Reuters) - Japanese stocks retreated from a 3-1/2-month high on Tuesday as a firmer yen weighed on the market, with automakers and chip-related companies leading the decline.

The benchmark Nikkei average dipped 0.6% to 23,030.77 by the midday break, off its highest close since Feb. 21 touched in the previous session.

This was despite an overnight rally on Wall Street that took the Nasdaq Composite to a record high and the S&P 500 in positive territory for the year as expectations for a swift economic recovery from a coronavirus-driven slump increased.

“As some technical signs suggested the market is overheated, it’s no surprise if we feel top heavy in the short term,” said Takeo Kamai, head of executions services at CLSA in Tokyo.

The broader Topix lost 0.4% to 1,623.49 by the recess, also off its highest closing since Feb. 21, with three-fourths of the 33 sector sub-indexes on the Tokyo exchange trading lower.

In the currency market, the safe-haven yen rebounded from Friday’s 2-1/2-month low versus the U.S. dollar, with the dollar/yen trading at 107.915 yen, a level unseen for a week.

As a firmer yen hurts Japanese manufacturers’ profits made abroad when repatriated, shares of export-oriented automakers came under pressure, with Nissan Motor tumbling 5.5% and Mazda Motor falling 2.7%.

Taking a weak lead from their Wall Street peers, chip-making gear maker Screen Holdings slid 3.5%, while test device maker Advantest shed 5.4%.

Bucking the overall market’s weakness, Lixil Group added 0.2% after the Nikkei business daily reported that the bathroom equipment maker plans to sell its majority stake in Lixil Viva, an operator of home improvement stores, to its domestic peer, Arcland Sakamoto.

Shares of Lixil Viva and Arcland Sakamoto advanced 3.5% and 15.3%, respectively. (Reporting by Tomo Uetake; Editing by Sherry Jacob-Phillips)

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