Tokyo shares slip but set for weekly gain on weaker yen, recovery hopes

  • Reuters
  • Stock Market News
Tokyo shares slip but set for weekly gain on weaker yen, recovery hopes
Credit: © Reuters.

SYDNEY, June 5 (Reuters) - Japanese stocks slipped as investors locked in some of the week's gains on Friday, but a weaker yen and overall optimism about an economic rebound from a coronavirus-driven slump kept the major indexes on track for a weekly rise.

The benchmark Nikkei average .N225 dropped 0.35% to 22,616.77 by the midday break, off its more than three-month high touched on Thursday. But the index was still up 3.4% for the week.

This week's global equity rally lost some steam overnight as traders took winnings from recent gains, backing away ahead of Friday's U.S. nonfarm payrolls data, which is expected to show further deterioration in the U.S. jobs market. MKTS/GLOB broader Topix .TOPX eased 0.33% to 1,598.51 by the midday recess, also off its more than three-month high, but with more than half of the 33 sector sub-indexes on the Tokyo exchange trading higher. For the week, the Topix was up 2.2% so far.

Analysts said although some profit-taking was unavoidable after the recent rallies, the overall sentiment is still positive.

Reflecting continued confidence in the revival of the global economy, the safe-haven yen weakened further, with the dollar/yen JPY=EBS hitting a fresh two-month high of 109.235 yen on early Friday and the euro/yen touching EURJPY=EBS a 13-month high of 123.965 yen overnight. FRX/

As a weak yen boosts Japanese manufacturers' profits made abroad when repatriated, shares of export-oriented automakers were in demand. Mazda Motor 7261.T jumped 4.8%, while Nissan Motor 7201.T and Honda Motor 7267.T gained 2.3% and 2.5%, respectively.

Longer-term U.S. Treasury yields jumped overnight, providing a tailwind for Tokyo-listed financial stocks .IINSU.T .IBNKS.T . Dai-ichi Life Holdings 8750.T advanced 4.6% and Sumitomo Mitsui Financial Group (SMFG) 8316.T climbed 1.8%. US/N

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