Nikkei slips on yen, uncertainty on Trump policies

* Market down for third day as yen gains

* Nikkei supported at Ichimoku cloud top

* Softbank gains on report on U.S. subsidiary

By Hideyuki Sano

TOKYO, Feb 20 Japanese shares fell for a third
consecutive session on Monday as the yen’s gains and uncertainty
about U.S. economic policies prompted profit-taking.

The Nikkei dropped as much as 0.6 percent to 19,115
— its lowest level since Feb. 9 — where it had a pivotal
technical support from the top of Ichimoku cloud, which stood at
19,114.

The Nikkei last stood down 0.2 percent at 19,190, having
declined 1.7 percent from a six-week high of 19,519 hit a week
ago.

“We’ve seen some upgrades in this earnings season. But even
taking that into consideration, the market is hardly cheap now,”
said Shingo Ide, chief equity strategist at NLI Research
Institute.

“Unless the yen weakens a bit more, there are few reasons to
buy Japanese shares aggressively,” he added.

The yen has risen to around 113 per dollar from
Wednesday’s low of 114.955, as the dollar quickly lost momentum
after a relief rally following the meeting with U.S. President
Donald Trump and Japanese Prime Minister Shinzo Abe.

“Although there was no tough talk on trade at the meeting,
we are likely to see a comprehensive economic talk between Japan
and the United States in April, when U.S. Vice President Mike
Pence is expected to visit Japan,” said Norihiro Fujito, senior
investment strategist at Mitsubishi UFJ Morgan Stanley
Securities.

The uncertainty over Trump’s policies on international trade
and tax is encouraging investors to take profits when they can.

Japanese institutional investors also have additional
incentives to take profits as they eye their financial year end
on March 31.

Amid the lack of a clear macro picture, Softbank
was the most actively traded stock in the morning, rising as
much as 3.3 percent after sources told Reuters that the company
is prepared to cede control of Sprint Corp to T-Mobile US
Inc.

Softbank’s previous attempt to merge a struggling Sprint
with T-Mobile fell through amid opposition from U.S. antitrust
regulators.

Bridgestone jumped to a 15-month high after the
tyre manufacturer announced on Friday it will buy back up to 6.4
percent of its own stock, or about 50 million shares, and retire
20 million Treasury stocks.

The broader Topix was down 0.2 percent at 1,541.30,
with 28 of the Tokyo Stock Exchange’s 33 industry subindexes in
the red in late morning trade.

(Reporting by Hideyuki Sano; Editing by Sunil Nair)

Source: Reuters

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