TOKYO: Japan’s Nikkei share average reversed course to trade marginally higher on Monday, as gains in financial stocks outweighed the drop in heavyweight Fast Retailing.
The Nikkei was 0.03% higher at 38,220.01 by the midday break.
It fell as much as 0.65% earlier in the session after opening higher.
“If there had not been declines of Fast Retailing, the Nikkei could have been stronger,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
The owner of Uniqlo brand Fast Retailing fell 2.45% to weigh on the Nikkei the most.
The company is facing a storm of online criticism in China after a BBC report quoted the CEO of its owner as saying the company does not source cotton from the far western region of Xinjiang.
A weakening yen also helped the Nikkei erase its losses, Yasuda said.
The yen was last down 0.52% at 150.56 as the dollar gained after losing 3.3% last week in its worst run since July.
Japan’s Nikkei slips on firmer yen
Shiseido tumbled 7.9% to become the worst performer on the Nikkei after the cosmetic maker downgraded its profit outlook for the next two years on Friday, following a downturn in sales to Chinese consumers.
The broader Topix rose 0.68% to 2,698.86.
Financial stocks rose on expectations that the Bank of Japan may raise interest rates at its policy meeting this month.
Over the weekend, BOJ Governor Kazuo Ueda was quoted as saying in local media that the timing of the next rate hike was “approaching”, as the economy was moving in line with the central bank’s forecasts.
The two-year JGB yield rose to 0.615%, its highest level since October 2008.
The banking index rose 2.54% to lead the Tokyo Stock Exchange’s 33 industry sub-indexes, with Sumitomo Mitsui Financial Group and Mizuho Financial Group rising 3.85% and 2.48%, respectively.
The insurance sector rose 2.32%, with Dai-ichi Life Holdings jumping 6%.
Source: Brecorder
