Japan Nikkei extends losses on worries over virus, Olympics

Japan stock market finished lower for third day in row on Friday, 16 July 2021, as risk aversion selloff continued on tracking weak lead from Wall Street overnight, rising tensions between China and the US, and expanding virus infections at home just days before the Olympic Games open. Meanwhile, yen's appreciation against the dollar also fuelled selloff.

At closing bell, the 225-issue Nikkei Stock Average declined 227.10 points, or 0.8%, to 28,051.99. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 3.31 points, or 0.17%, to 1,936.30.

Trading volume turnover in the 1st section decreased to 935 million shares from 971 million shares in previous session. Trading value turnover decreased to 2,155.01 billion yen from 2,114.21 billion yen in previous session.

Total 20 of 33 sectors sub-indexes on the Tokyo exchange ended lower, with bottom performing were Pharmaceutical (down 1.9%), Precision Instruments (down 1.4%), Mining (down 1.1%), Land Transportation (down 1%), Construction (down 0.8%), and Oil & Coal Products (down 0.8%), while top performing issues were Marine Transportation (up 2.9%), Iron & Steel (up 1.4%), Nonferrous Metals (up 0.8%), Securities & Commodities Futures (up 0.8%), and Glass & Ceramics Products (up 0.5%).

An expansion in the number of Covid-19 infections in the greater Tokyo area prompted growing concerns among investors at home and abroad about Olympic Games. Japan has already declared a fourth state of emergency for Tokyo until August 22 to combat a recent surge in infections ahead of the Olympic Games opening ceremony in the city in a week. The Tokyo metropolitan government reported 1308 new infections on Thursday, the highest figure since mid-January.

CURRENCY NEWS: The Japanese yen traded at 110.01 per dollar, against an earlier high of 109.72 against the greenback, after Japan's central bank downgraded its real GDP forecast for 2021 to 3.8% growth, as compared with the 4% growth forecast made in April. The Bank of Japan also kept its yield curve control target at -0.1% for short-term interest rates and 0% for 10-year Japanese government bond yields.

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