Japan Nikkei gains on buybacks

Headline indices of the Japan share market rebounded on Tuesday, 16 October 2018, as investors chased for bargain buying after the market sharp fall a day earlier. However, market gains were limited amid continuing U.S.-China trade war rhetoric, increasing geopolitical tensions between Saudi Arabia and the international community, and concerns about impact of Japan's planned sales-tax hike after Prime Minister Shinzo Abe pledged to go ahead with increasing the national sales tax to 10%. Total 23 out of TSE 33 issues inclined, with shares in Mining, Real Estate, Iron & Steel, Nonferrous Metals, and Marine Transportation issues being notable gainers, while Precision Instruments, Services, Air Transportation, and Retail Trade issues were notable losers. Around late afternoon trade, the 225-issue Nikkei index gained 132 points, or 0.6%, at 22,403.25. The broader Topix index of all First Section issues on the Tokyo Stock Exchange added 4.87 points, or 0.3%, to 1,680.31.

Shares of Softbank rebounded following yesterday's tumble. Softbank shares tumbled yesterday amid concerns of the company's ties to Saudi Arabia, which is under mounting pressure internationally following the disappearance of a prominent journalist who was a critic of the administration.

 

Shares linked to personal consumption fell on concerned about impact of Japan's planned sales-tax hike after Prime Minister Shinzo Abe pledged on Monday to go ahead with increasing the national sales tax to 10% from 8percent next October. Department stores underperformed, with Takashimaya Co falling 1.6% and Isetan Mitsukoshi 1%. Cosmetics makers Shiseido Co shed 2.3% and Kose Corp tumbled 4%, while baby bottle maker Pigeon Corp stumbled 7.6%.

Shares of Apple suppliers were lower, following fall in Apple shares in the Wall Street overnight on a Goldman Sachs report saying there were multiple signs of rapidly slowing consumer demand in China, which could affect demand for iPhones. Taiyo Yuden tumbled 4% and Murata Manufacturing Co slid 1.2%.

CURRENCY NEWS: Japanese yen appreciated against greenback on Tuesday, amid safe haven currency demand. The Japanese yen was at 111.83 against the dollar after strengthening from levels above 112.1 yesterday.

OFFSHORE MARKET NEWS, US stock market closed down on Monday. The S&P 500 slipped by 0.6% to 2,750.79 while the Nasdaq Composite fell by 0.9% to 7,430.74. The Dow Jones Industrial Average shed 89.44 points to 25,250.55.

European shares closed mostly higher on Monday. The German DAX Index advanced by 0.8% and the U.K.'s FTSE 100 Index climbed by 0.5%, while the French CAC 40 Index bucked the uptrend and closed marginally lower.

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