TOKYO: Tokyo stocks fell Wednesday morning, as profit-taking set in after the benchmark index’s longest winning streak this year, with markets awaiting news on Japan’s plans for a consumption tax hike.
The weak start followed a lackluster session Tuesday on Wall Street, where the Dow and S&P 500 indexes dropped ahead of a heavy week of economic news, including the US jobs report for May.
Investors on Wednesday were eyeing a press briefing by Japanese Prime Minister Shinzo Abe who is poised to announce he will delay the tax rise planned for next year to avoid damaging a weak economy.
Tokyo is scheduled to raise the sales tax from eight percent to 10 percent in April 2017 to help pay down Japan’s massive national debt, but Abe is expected to push it back by two-and-a-half years when he will likely no longer be in office — putting the tough decision onto his successor.
The yen also picked up in currency trading after fresh polls showed British voters more in favor of quitting the European Union, just weeks from a referendum on the so-called Brexit.
A stronger Japanese currency is a negative for exporters as it deflates the value of their overseas profits.
At the lunch break, the Nikkei 225 was down 0.57 percent, or 97.38 points, at 17,137.60, following five straight positive sessions.
The broader Topix index of all first-section shares was down 0.44 percent, or 6.08 points, to 1,373.72.
“Investors may take profits after Japanese stock markets rose for five days,” Chihiro Ohta, senior strategist at SMBC Nikko Securities told Bloomberg News.
“Brexit is rearing its head for investors after the latest poll numbers, which is leading to risk-off and yen-buying,” Ohta added.
The dollar edged down to 110.68 yen from 110.73 Tuesday in New York.
In share trading, mobile carrier SoftBank climbed on news that it will sell at least $7.9 billion of its stake in Chinese e-commerce giant Alibaba.
SoftBank jumped 2.21 percent to 6,366 yen after saying it would reduce its 32.2 percent holding in the Chinese company to about 28 percent, and use the sale proceeds to pay down its huge debt load.
Toyota shares rose 0.65 percent to 5,821 yen and Nissan edged 0.13 percent higher to 1,126.5 yen. AFP