Japanese stocks dipped on Friday as investors were cautious before an impending US jobs report, a crucial data point that could influence the timing of the Federal Reserve’s next rate hike and underpin near-term direction for risk asset markets. The Nikkei fell 0.2 percent to 16,867.35, following four straight days of gains. The index was still headed for a 2.5 percent rise on the week, helped by a sharp slide in the yen versus the dollar. The dollar popped above 104 yen late on Thursday before slipping back to around 103.600 on Friday.
“The dollar pulled back slightly against the yen and this looks to have stalled the Nikkei’s advance. As for the US jobs report, the main points are if Wall Street can weather potentially upbeat data and how much the dollar can gain against the yen,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. The US employment report, due later on Friday, is being watched closely by global markets as it could make or break the case for a near term Fed rate increase.
Financial markets in Tokyo will be closed on Monday for a national holiday. “Potential sources of turbulence that can impact broader risk sentiment over the long weekend is developments in the euro zone and volatile sterling,” Ichikawa added. The pound, battered through the week by “hard Brexit” concerns, tumbled to a fresh three-decade low of $1.1378 on Friday.
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Among individual shares, Seven & i Holdings Co Ltd fell 3.4 percent while H20 Retailing Corp rose 2.3 percent. Seven & i, Japan’s second-biggest retailer by sales, said on Thursday it has entered a business and capital alliance with smaller peer H2O Retailing, with both planning to take a 3 percent stake in each other.
Tokyo’s retailing sector was down 1.6 percent, pressured by recently lacklustre earnings from some companies in the sector.
Supermarket operator Aeon fell 3 percent while department store operator Isetan Mitsukoshi Holdings lost 2.1 percent.
Drug store operator Kirindo Holdings Co lost 5.4 percent after it slashed its operating profit forecast for the year through February 2017, hurt by regulatory changes in pharmaceutical pricing and prescriptions.
Tokyo’s sea transport sector rose more than 3 percent following an overnight jump in the Baltic sea freight index, which tracks ship rates for dry bulk commodities.
Shipper Nippon Yusen was last up 4.1 percent and Mitsui OSK Lines rose 3.7 percent.
The broader Topix slipped 0.3 percent to 1,349.75 and the JPX-Nikkei Index 400 shed 0.3 percent to 12,091.33.