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Tokyo shares drift lower in early trade
TOKYO, April 26, 2021 (BSS/AFP) – Tokyo stocks slipped in early trade Monday as investors assess the impact of a virus state of emergency in Japan, although rallies on Wall Street provided support.
The benchmark Nikkei 225 index was off 0.35 percent or 101.17 points to 28,919.46 in early trade, while the broader Topix index slipped 0.27 percent or 5.12 points to 1,909.86.
The dollar stood at 107.84 yen, nearly unchanged from 107.89 seen Friday in New York.
The Tokyo market is facing pressure from renewed coronavirus restrictions being imposed on major commercial hubs, but the strength of US shares was encouraging investors to pick up bargains.
The Japanese government issued the state of emergency from Sunday for the capital Tokyo, and the western hub of Osaka and adjacent areas, asking residents to avoid non-essential outings. It also requests the closure of businesses such as department stores and bars.
The state of emergency “will serve as a psychological weight, but US shares are moving at high levels and should provide some support,” Okasan Online Securities said in a commentary.
“The Tokyo market will likely remain range-bound” as investors digest corporate earnings and look for promising shares, Okasan said.
US shares have been rising, thanks to promises of economic recovery, backed by strong indicators and strong corporate earnings.
The market also faces selling pressure after the ruling Liberal Democratic Party lost all three by-elections for legislative seats during the weekend.
Among major shares, Japan Airlines gained 3.18 percent to 2,271 yen following reports that it was moving to purchase Chinese low cost carrier Spring Airlines, aiming to capture Chinese tourism demand after the pandemic.
Sony Group fell 0.72 percent to 11,755 yen. Toyota gave up earlier gains and fell 0.10 percent to 8,269 yen.
But Honda rose 1.52 percent to 3,282 yen after announcing that it will aim to produce only electric or fuel cell vehicles by 2040.
BSS/AFP/MSY/0840 hrs