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Japan Stocks fall on profit booking

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Japan share market finished session lower on Wednesday, 01 July 2020, as selling to lock in profits amidst lingering concerns over the spread of the new coronavirus in and outside Japan, yen appreciation against greenback, and downbeat Bank of Japan (BOJ) Tankan survey data.

At closing bell, the 225-issue Nikkei Stock Average declined 166.41 points, or 0.75%, to 22,121.73. The broader Topix index of all First Section issues on the Tokyo Stock Exchange shed 20.16 points, or 1.29%, at 1,538.61.

Tokyo market commenced trading with downbeat note after the BOJ's quarterly Tankan survey released before the opening showed sentiment among large manufacturers plummeted from minus 8 to minus 34, the lowest level since June 2009, due to the economic fallout caused by the coronavirus pandemic.

 

Also, the latest survey from Jibun Bank revealed on Wednesday that Japan manufacturing sector continued to contract in June, with a manufacturing PMI score of 40.1. That's up from 38.4 in May, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, firms operated below full capacity due to slow-moving order books. Export demand continued to decline as Covid-19 disruptions lingers, although business sentiment rebounded into positive territory.

Further, risk sentiments was dampened amid concerns over the increase in new coronavirus cases in the capital, as Japan's top government spokesman warned a state of emergency could be re-imposed. Tokyo reported 67 new cases today, the highest since May 4 and the daily number of new cases has been hovering around 50 since last week.

Shares of automakers struggled on the downbeat Tankan result as well as a stronger yen. Isuzu Motors slumped 2.5%, Honda Motor sagged 1.7%, and Toyota Motor lost 1.1%.

Shares of pharmaceuticals were lower. Takeda Pharmaceutical dropped 2.15% and Astellas lost 3.36%.

NTT Docomo fell 1.3%, after a government panel said Tuesday the fee the telecom giant charges for a budget mobile phone carrier to access its service network should be lowered.

CURRENCY: The U.S. dollar was under pressure as Japanese exporters sold the dollar for the yen for settlement purposes. The U.S. currency fetched 107.69-70 yen, compared with 107.88-98 yen in New York and 107.72-73 yen in Tokyo late Tuesday. The euro was quoted at 121.02-03 yen against 121.20-30 yen in New York and 120.89-93 yen in Tokyo late Tuesday.

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First Published: Jul 01 2020 | 6:01 PM IST

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