Japan’s Nikkei share average edged down on Wednesday morning after U.S. stocks weakened on dismal earnings in the corporate sector while falling oil prices hurt mining stocks. The Nikkei dropped 0.3 percent to 17,309.53 in midmorning trade, after rising to a six-month high on the previous day. Japanese stocks had been recovering since the beginning of this month after oil prices started rising and the dollar began strengthening against the yen.
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Foreign investors, who were net sellers of Japanese stocks for five weeks, turned net buyers in the first week of October.
“Foreign hedge funds, whose risk stances rose on the back of these reasons, may start to unwind their positions, so we need to watch carefully oil price and dollar-yen moves,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Oil prices fell on Wednesday, pulled down by a report of surging U.S. crude inventories, rising output in Nigeria and squabbling among producers about a planned output cut, which together re-ignited concerns over a global supply glut.
The mining sector was the worst performing sector on the board, tumbling 1.8 percent. Inpex Corp fell 1.9 percent and Japan Petroleum Exploration Co shed 1.3 percent.
Construction machinery equipment maker Komatsu Ltd stumbled 3.8 percent after Caterpillar Inc gave a downbeat forecast when it reported a lower third-quarter profit overnight.
Exporters were mixed, with Honda Motor Co shedding 0.7 percent, Nissan Motor Co advancing 0.1 percent and Panasonic Corp dropping 1.5 percent.
The broader Topix fell 0.1 percent to 1,376.45 and the JPX-Nikkei Index 400 declined 0.1 percent to 12,340.54.
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