Japan Stocks trade mixed on profit booking

The Japan share markets were mixed on Thursday, 17 October 2019, as investors opting to take profits following overnight drops on Wall Street after U.S. weaker than expected economic data and the Nikkei's 10-month closing high a day earlier. Meanwhile selloff pressure fueled further on concerns over simmering geopolitical tensions, a global economic slowdown and developments in Brexit talks in Brussels. Around afternoon trade, the 225-issue Nikkei Stock Average edged up 1.43 points, or 0.01%, to 22,474.35, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 5.87 points, or 0.36%, at 1,625.64.

Total 27 issues of the 33 industry category of Topix index declined into negative territory, with Fishery, Agriculture & Forestry, Electric Power & Gas, Iron & Steel, Nonferrous Metals, Pulp & Paper and Securities & Commodities Futures issues being notable losers, whereas Marine Transportation, Air Transportation, and Chemicals issues were notable gainers.

US retail sales unexpectedly fell 0.3% in September, raising concerns that the slowdown in business spending evident in the manufacturing sector, resulting from President Donald Trump's international trade policies, may be spilling over into consumer spending.

Meanwhile, doubt on prospects for the future of the trade deal between the two countries announced last Friday after the US House of Representatives passed pro-democracy legislation in support of Hong Kong, enraging Beijing. President Donald Trump said he would probably not sign any trade deal before he meets with Chinese President Xi Jinping at the upcoming APEC Forum in Chile, but said a partial trade deal was being formalised.

Brexit negotiations hit a wall on Wednesday, the last day of talks before an important European Union summit. The deal would have to be approved by the EU, and then by the U.K. Parliament. If it is not approved by Oct. 19, British Prime Minister Boris Johnson is legally obliged to ask the EU for an extension to the current departure date of Oct. 31.

Shares of Japanese chip-related companies fell, taking their cue from Wall Street peers as well as Dutch ASML, which dropped 4.5% as investors locked in profits after the semiconductor equipment maker announced better-than-expected results on Wednesday. Tokyo Electron dropped 0.6% and Screen Holdings slid 1.5%.

CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, was marginally stronger on Thursday, after lacklustre U.S. retail data and gathering doubts about a Sino-U.S. trade deal. The Japanese yen traded at 108.72 per dollar against 108.71 per dollar in New York Wednesday afternoon.

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