Nikkei Records Fifth-Day Dip On Weak US Jobs Report

Japan’s Nikkei average fell 1.5 percent to post its fifth straight day of losses on Monday, with a weak U.S. jobs report raising fresh concerns over recovery in the world’s largest economy and as a stronger yen weighed on exporters.

The Nikkei has dropped 5.3 percent since April 2 , marking its longest losing streak since late November.   “We are already in the 9,500s now (on the Nikkei). We will see if that 9,500 (level) provides support. If not, our technical analyst is looking for the 9,300 handle (for support),” said Naomi Fink, Japan equity strategist at Jefferies.

“It’s an interim correction. We went, perhaps, a little too far, too fast.”

The benchmark Nikkei ended down 142.19 points at 9,546.26, its lowest closing level since Feb. 21. Strategists said the benchmark’s 13-week moving average, near 9,509, as well the 50 percent retracement of its fall from February to November last year, near 9,508, acted as support.

Last Friday’s U.S. non-farm payroll data disappointed investors, with the latest data showing 120,000 jobs added in March, worse than the forecast gain of 203,000 jobs. The unemployment rate dipped to 8.2 percent from February’s 8.3 percent.

Despite the five-day losing streak, some strategists said the market correction was unlikely to last. “There continue to be high expectations for Japan’s corporate earnings recovery based on current forex levels, so I don’t think there is reason to continue the sell-off for much longer,” said Hiroyuki Fukunaga, CEO of Investrust.

In Tokyo, exporters and financials came under pressure after they led the Nikkei rally in January to March, when the index gained more than 19 percent to log its best first-quarter performance in 24 years.

Honda Motor Co Ltd lost 2.4 percent, Nissan Motor Co Ltd fell 3.4 percent and TDK Corp declined 1.7 percent, while Japan’s top investment bank Nomura Holdings dropped 2 percent.

Sony Corp bucked the overall trend to climb 0.6 percent after a report said the company would cut about 6 percent of its global workforce as early as year-end to turn around its business.

Car-parts maker Press Kogyo Co sagged 4.6 percent after Deutsche Bank downgraded it to “hold” from “buy”, saying near-term growth prospects have already been priced in.

The broader Topix dropped 1.5 percent to 813.69. Trading volume on the main board was thin, with 1.6 billion shares changing hands, its lowest daily volume since Jan. 16.

The Nikkei offers a dividend yield of 2.4 percent, more than the S&P 500’s 2 percent, StarMine data showed.

These data have been reported by Reuters.

 

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