Japan’s Nikkei share average remained solidly on track for a winning week on Friday, underpinned by record closing highs on Wall Street even as a firmer yen put a damper on sentiment. The Nikkei was down 0.3 percent at 19,753.42 in morning trade, but was still up 0.8 percent for the week. “The Nikkei is getting a drag today from a stronger yen, which has offset the impact of yesterday’s Wall Street gains,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.
“The Nikkei is heavy as it approaches the key 20,000 level, so we’re likely to see it trade in a range next week,” he said. The dollar lost some ground to the yen, slipping 0.1 percent to 111.69 yen, below its one-week peak of 112.13 scaled on Wednesday.
On Thursday, both the S&P 500 and the Nasdaq Composite closed at record highs, fuelled by gains in the consumer discretionary sector after strong reports from retailers. Weekly U.S. jobless claims also highlighted brightening prospects for the U.S. economy as the four-week moving average of claims hit a 44-year low, which helped steady the dollar. Other data showed the goods trade deficit widening last month and inventories decreasing.
“Lately, the Nikkei has been even more sensitive to foreign exchange market moves than it is to U.S. stocks,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “And every time it moves higher, some investors who bought at lower levels earlier this year rush to take profits,” he said.
Shares of Nintendo jumped more than 3 percent to their highest since July, continuing their recent ascent on hopes for continued strong sales of the Nintendo Switch, its latest blockbuster game product. Share of Toshiba added 0.4 percent, after business daily Nikkei reported that the beleaguered electronics giant informed its lenders that it will begin negotiating with four suitors that submitted second-round bids for its memory chip unit.
Oil and mining shares fell, after oil prices skidded 5 percent on Thursday as a meeting of OPEC countries disappointed some investors who had hoped for larger production cuts. The oil and coal subindex on the Tokyo Stock Exchange dipped 0.2 percent, while the mining subindex tumbled 2.3 percent
The broader Topix fell 0.4 percent to 1,572.74, while the JPX-Nikkei Index 400 also shed 0.4 percent to 14,030.15.