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Asia, News

Nikkei slips from 3-decade high on profit-taking, Topix sheds over 1%

TOKYO, Sept 15 (Reuters) – Japanese shares retreated on Wednesday from three-decade peaks hit in the previous session, as investors took profits after a strong rally over the last two weeks on hopes of a new government and a fresh economic stimulus.

The Nikkei average dropped 0.79% to 30,428.74. On Tuesday, it rose above its February peak to reach 30,795.78, its highest level since August 1990. The broader Topix shed 1.14% to 2,094.80.

The markets’ rally has gathered pace since Sept. 3 when Prime Minister Yoshihide Suga announced his plan to step down, bolstering hopes of new stimulus package. Investors also saw reduced risk of the ruling coalition losing in an upcoming election that must be held by November.

Vaccine Minister Taro Kono is now seen as a leading candidate in the ruling Liberal Democratic Party’s (LDP) leadership election on Sept 29.

“The market had risen a bit too much too fast… Investors now want to see the outcome of the LDP race. While Kono seems to be viewed as a reformist, it is not entirely clear what kind of economic policies he will adopt,” said Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset Management.

SoftBank Group lost 5%, weighed by concerns about its exposure to Alibaba and other Chinese tech firms as Beijing steps up regulation in the sector.

Property builders were the worst-performing sectoral index with a fall of 2.4%. Some analysts attributed the weakness to a spillover from troubles in Chinese real estate shares.

Many Japanese suppliers of Apple slid after the iPhone maker’s shares dropped on Tuesday when it unveiled its iPhone 13.

Murata Manufacturing lost 2.8%, while Ibiden dropped 2.0%.

Elsewhere, Park24 lost 6.9% after the operator of parking lots posted its six consecutive quarterly net loss, hit by the COVID-19 pandemic. (Reporting by Hideyuki Sano; editing by Uttaresh.V)

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