Sunday, May 28

Japan’s Nikkei drops on profit-booking, US debt impasse

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TOKYO — Japan’s Nikkei share index dropped 1% on Wednesday, set for a second straight session of losses, as investors continued to lock in profits following a recent rally, while no breakthrough yet over the US debt ceiling also dampened risk appetite .

Shares of Tokyo Electron Ltd slipped 1.02%, tracking losses in US chip-related peers. CyberAgent Inc , a major investor in a new share sale in Rakuten Group Inc, sank 3.97% ahead of a pricing of the offering. Shares of Rakuten edged 0. 67 % higher.

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Toyota Motor Corp jumped 4.6%, recovering from a flash crash on Wednesday that analysts speculated was a trading error.

The nikkei was download 1.08% at 30,623.83 by the midday break. In the previous session, the index reTreated from a peak of 31,352.53, a level last seen in August 1990 1990 . Broad Topix Fell 0.54% to 2,149.76 on Wednesday.

Sentiment at Japanese manufacturing giants turned positive for the first time this year, while analysts said the Nikkei will end the year around the psychologically key 30,000 level, according to Reuters polls.

“Markets have run up quickly, and Japan especially so,” said Mio Kato, founder of LightStreamm Research, who publishes on the Smartkarma platform. “This feels more like a pause for the market to figure out which way next – continue the rally or mean reversion.”

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Technical indicators have been flashing overheating signals in Japan, while US shares were down sharply on Tuesday as lawmakers continued debt ceiling talks to forestall a default.

“Concerns over the US debt ceiling issue have the potential to weigh on the global stock market, not just in America,” said Nomura strategist Kazuo Kamitani.

Shares of Uniqlo operator Fast Retailing Co sank 2.59% after a report said the company may sell off its shuttered stores in Russia.

A jump in oil prices weighed on the airlines sub-index, with ANA Holdings Inc sliding 2.61%.

(Reporting by Rocky Swift; Editing by Sherry Jacob-Phillips)

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