Japan Stocks end mixed on concern over COVID-19 spike

Japan shares settled mixed on Friday, 18 December 2020, with the 225-issue Nikkei Stock Average closing lower while the broader Topix index settled higher, as concerns over surging coronavirus cases in Japan offset investors' optimism over the development of vaccines.

At closing bell, the 225-issue Nikkei Stock Average fell 43.28 points, or 0.16%, to 26,763.39. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added marginal 0.66 points, or 0.04%, to 1,793.24. The Nikkei and Topix posted weekly gains of 0.41% and 0.63%, respectively.

Investor sentiment has been hurt by recent record numbers of coronavirus infections in Tokyo and Japan as a whole. The Japanese capital Tokyo raised its COVID-19 alert level to the highest of four stages on Thursday as the number of new cases spiked to a record daily high of 822.

The market losses were capped as the Bank of Japan's widely expected decision to extend its package of steps aimed at easing corporate funding strains due to COVID-19. Meanwhile, the yield target on the 10-year Japan government bond was set at around 0% while the short-term interest target was set to -0.1%. The Japanese central bank also said it will conduct an assessment for further effective and sustainable monetary easing as it looks to support the economy and achieve its ever elusive inflation target, with the findings likely to be out in March.

The market also found some support after U.S. pharmaceutical giant Pfizer Inc. sought approval from Japanese authorities for its vaccine in the first such request filed in the country.

Railway operators declined on fears that the resurgence of the virus could prompt further restrictions on people's movements ahead of the New Year holiday. Keio sank 140 yen, or 1.8%, to 7,500 yen, Keisei Electric Railway slid 105 yen, or 2.9%, to 3,470 yen, and Odakyu Electric Railway sagged 105 yen, or 3.3%, to 3,100 yen.

Among exporters, some automakers were supported after the yen slowed its rise against the dollar. Honda Motor gained 70 yen, or 2.3%, to 3,094 yen while Nissan Motor was up 8.40 yen, or 1.5%, at 582.60 yen.

CURRENCY NEWS: The Japanese yen traded at 103.39 per dollar, having seen levels above 103.8 against the greenback earlier in the trading week.

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