Nikkei slides on virus curbs, uncertainty ahead of U.S. Senate runoffs

  • Reuters
  • Stock Market News
Nikkei slides on virus curbs, uncertainty ahead of U.S. Senate runoffs
Credit: © Reuters.

TOKYO, Jan 5 (Reuters) - Japanese shares slid on Tuesday as the government looks set to declare a state of emergency to deal with rising COVID-19 infections while uncertainty about Senate runoffs in the U.S. state of Georgia also curbed investors' risk appetite.

Nikkei share average .N225 dipped 0.37% to 27,158.63, while the broader Topix .TOPX ticked down 0.19% to 1,791.22, both indexes marking their third straight session of losses.

"There is little reason to buy hastily today ahead of the runoff in Georgia," said Yuya Fukue, trader at Rheos Capital Works.

The elections will determine who will control the Senate, and thereby how much U.S. President-elect Joe Biden can push through Democrats' agenda, including rewriting the tax code, boosting stimulus and infrastructure spending. .IAIRL.T and train operators .IRAIL.T were among worst performers in the Tokyo Stock Exchange's 33 industry subindexes, falling 1.2% and 1.5% respectively, on the prospects of fresh curbs to contain the health crisis.

Local media reported earlier in the day that Japanese Prime Minister Yoshihide Suga told a ruling party meeting a state of emergency declaration for Tokyo and the surrounding area would be decided on Thursday. Disney Resort operator Oriental Land 4661.T dropped 2%.

Carmakers .ITEQP.T fell 1.2% as the yen's gains against the U.S. dollar could chip away their profit from exports.

The yen strengthened to 102.715 per dollar JPY= on Monday, its highest in nearly 10 months.

On the other hand, many technology shares maintained their firmness as the COVID-19 pandemic worsened in many countries.

Sony 6758.T rose 1.3% to reach a 20-year high while Tokyo Electron 8035.T surged 2.6% to a record high. Internet firm Z Holdings 8604.T gained 3.5%.

The Bank of Japan on Monday reduced the size of its buying in exchange traded funds to 50 billion yen ($485.91 million), compared with about 70 billion yen in recent months. But the market already took the cut in its stride.

($1 = 102.9000 yen)

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