Japan’s Nikkei snaps 4-day winning streak on Fed rate hike woes, chip stocks drop

Japan’s benchmark Nikkei stock index snapped a four-day winning streak Friday amid fresh concerns that the U.S. Federal Reserve will push ahead with its aggressive monetary tightening policy.

The 225-issue Nikkei Stock Average lost 195.19 points, or 0.71 percent, from Thursday to close the day at 27,116.11. The broader Topix index, meanwhile, fell 15.67 points, or 0.82 percent, to finish at 1,906.80.

Dealers here said that investors were in a circumspect mood following better-than-expected U.S. weekly jobless claims data and ahead of the release of key U.S. employment data for September due out later on Friday.

They explained that along with Fed authorities reiterating the central bank’s intention to continue with its interest rate hikes to combat inflation, the latest and upcoming U.S. jobs data would likely underscore the Fed’s bullish monetary policy stance.

“Investors adopted a wait-and-see stance ahead of the upcoming release of U.S. employment data for September to get clues on the condition of the world’s largest economy and the prospect of the higher rates,” Shingo Ide, chief equity strategist at the NLI Research Institute, was quoted as saying.

“There is a strong view that uncertainties will continue for a while,” even if the data turns out to be favorable for the labor market, Ide said.

Chip-related issues dragged the broader market lower, tracking losses on Wall Street overnight, with U.S. chipmaker Advanced Micro Devices Inc. adding to concerns after announcing third-quarter results that missed market expectations.

“It’s difficult to see profits growing, so it looks like semiconductor-related stocks will remain soft,” Takamasa Ikeda, a portfolio manager at GCI Asset Management, was quoted as saying, with regards to the chip industry.

Display and sensor maker Sharp was the Nikkei’s biggest loser, dropping 4.2 percent, while Nikkei heavyweight Tokyo Electron, which makes chip manufacturing equipment, lost 0.8 percent.

Chipmaker Renesas Electronics, for its part, ended the day 0.7 percent lower.

Retail issues also came under selling pressure, with Seven & I Holdings Co. Ltd. retreating 3.5 percent, despite upwardly revising its profit outlook for the current fiscal year.

Rakuten Group Inc. lost 1.9 percent, reversing the previous day’s gains made after announcing Mizuho Financial Group’s plan to purchase a 20 percent stake in Rakuten Securities, with an investment of around 80 billion yen (about 552 million U.S. dollars).

Transportation issues bucked the downward trend, however, with Japan Airlines climbing 0.9 percent, while ANA Holdings rose 0.4 percent.

By the close of play, machinery, insurance and marine transportation issues comprised those that declined the most, with falling issues outpacing rising ones by 1,254 to 500 on the Prime Market, while 82 ended the day unchanged.

On the Prime Market on Friday, 1,111.96 million shares changed hands, down from Thursday’s volume of 1,139.43 million shares.

The turnover on the final trading day of the week came to 2,719.59 billion yen (18.76 billion U.S. dollars).