Japan stocks slip from 34-year high on sell-off for profit lock

Japan’s Nikkei index inched higher at close on Friday, coming off from a fresh 34-year high as investors sold stocks to lock in profits.

The Nikkei edged up 0.09 per cent to 36,897.42 after jumping as much as 1.15 per cent to 37,282,26, its highest since February 1990.

“Investors wanted to sell stocks as the Nikkei reached the 37,000 milestone. The pace of the gains was too fast,” said Shuji Hosoi, senior strategist at Daiwa Securities.

SoftBank Group jumped 8.72 per cent, rising for a second straight session, after the tech investment firm returned to profit for the first time in five quarters.

The jump in shares was also driven by a more-than-55 per cent surge in Arm Holdings, in which SoftBank owns 90 per cent, on Thursday after the British tech company forecast quarterly sales and profit above Wall Street expectations.

Uniqlo-brand owner Fast Retailing fell 0.92 per cent, weighing on the Nikkei the most.

The broader Topix gave up early gains to fall 0.19 per cent to 2,557.88, weighed by Toyota Motor’s 0.81 per cent drop.

Nissan Motor tanked 11.56 per cent after the automaker trimmed its sales volume forecast for this financial year and amid worries about its business in China.

Of 225 shares on the Nikkei, 87 stocks rose and 136 fell with two flat.  Tokyo stocks rose Friday morning as a weaker yen and good earnings results lifted the shares of major companies, with the Nikkei index topping the 37,000-point threshold for the first time in 34 years.

According to Kyodo News, the 225-issue Nikkei Stock Average rose 166.63 points, or 0.45 per cent, from Thursday to 37,029.91.

The broader Topix index was down 0.43 point or 0.02 per cent, at 2,562.20. The Nikkei and Topix both briefly reached their highest intraday levels since February 1990.

The yen wallowed near a 10-week low on Friday, while the dollar ground towards a fourth weekly advance as traders dialled back bets on how quickly the Bank of Japan will raise interest rates and how soon the Federal Reserve will cut them. The yen was little changed at 149.315 per dollar in early Asian trading, after dipping to 149.48 late in the previous session for the first time since Nov. 27.

BOJ Deputy Governor Shinichi Uchida on Thursday said “it’s hard to imagine” that the central bank would keep raising rates “rapidly” even after ending negative interest rate policy, which the market expects to happen as early as next month.

On Friday morning in Tokyo, Japanese Finance Minister Shunichi Suzuki said that he was “watching FX moves carefully,” while also repeating that decisions on monetary policy are up to the central bank. The yen was unfazed by the warning.