Japan's Nikkei share average edged down on Monday after solid U.S. jobs data bolstered bets that the Federal Reserve will raise interest rates as early as September for the first time in nearly a decade.
Japan’s Nikkei share average edged down on Monday after solid U.S. jobs data bolstered bets that the Federal Reserve will raise interest rates as early as September for the first time in nearly a decade.
Companies with heavy exposure to China such as steelmakers and some trading houses also came under pressure after Beijing released disappointing trade data at the weekend.
By the midday break, the Nikkei average was down 0.1 percent at 20,712.03, while the broader Topix dropped 0.1 percent to 1,677.47.
“The market is digesting the weekend data from U.S. and China. Investors were finally reminded of the reality that the long-lasting era of quantitative easing is ending in a month,” said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo.
The U.S. data on Friday showed 215,000 non-farm jobs were added in July, less than the 223,000 forecast by economists, but the unemployment rate held at a seven-year low of 5.3 percent, reinforcing expectations that the U.S. Federal Reserve will raise interest rates next month.
In China, data showed a surprise slump in exports and another heavy fall in factory-gate prices in July, putting downward pressure on China-linked stocks in Tokyo.
Among them were steelmaker JFE Holdings, trading company Itochu Corp, air conditioner maker Daikin Industries and industrial robot maker Fanuc, all of which lost between 4.3 percent and 2.1 percent.
Other notable movers include Tokyo Electric Power Company (Tepco), slumping as much as 8.1 percent, after the operator of the Fukushima nuclear plant did not make it to the JPX-Nikkei Index 400 in the index’s annual reshuffle announced on Friday.
It was the heaviest-traded stock by turnover on the main board.
“Japanese stocks look well supported considering the slump in commodity prices and a seven-day losing streak in the U.S. Dow Jones average,” said Yasuo Sakuma, portfolio manager at Bayview Asset Management.
As Japan’s corporate earnings season coming closer to an end, investors snatched up companies which have reported forecast-beating results or upbeat earnings outlooks.
KDDI climbed 3.9 percent after the mobile operator reported strong quarterly earnings on Friday.
Japan Display jumped 18.1 percent to become the second best performer on the Topix after the smartphone display marker posted operating profit of 2.2 bln yen in Apr-June, reversing loss of 12.6 bln yen in the same period last year.
Lixil Group fell 6.7 percent after the bathroom equipment maker reported a net loss of 32.92 bln yen for the April-June quarter.