Japan’s Nikkei drops as focus shifts to earnings

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TOKYO — The average for Nikkei stocks in Japan fell slightly on Thursday, as investors focused on the outlook for individual stocks as earnings season is in full swing.

The Nikkei was down 0.19% at 27,379.40 at the midday break. It has traded occasionally in positive territory but can now snap a three-day winning streak.

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The broader Topix index fell 0.52%.

« In my view, the Nikkei was exceptionally strong yesterday, » Nomura Securities strategist Kazuo Kamitani said in a press briefing. « The fact that it closed above 27,400 gave me the impression that Japanese stocks are strong. »

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Canon Inc was the Nikkei’s biggest loser, falling 6.49% after it released its quarterly earnings report and lowered its net profit forecast.

Seiko Epson Corp, which also makes printers, fell 4.84% on Canon’s warning of lower demand due to fewer customers working from home.

Hitachi Construction Machinery Co Ltd made the biggest gains in the Nikkei and rose 4.60% on its earnings report. The company now expects operating profit for the year to be 17.6% higher than previously forecast.

The Topix-listed video game maker Capcom Co Ltd rose 7.75% after raising its profit forecast for the current year.

With the Bank of Japan holding its final policy review meeting on Thursday and Friday this week, most market participants view a change to its ultra-accommodative monetary policy as unlikely.

The BOJ has been an outlier this year as other central banks raise interest rates to fight inflation. « We believe the meeting will likely have a limited effect on the market, » Nomura’s Kamitani said.

Of the 225 constituents of the Nikkei, 152 declined, 65 advanced and eight traded flat. (Reporting by Sam Byford; Editing by Rashmi Aich)