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Nikkei edges lower as exporters weak; but financials gain on U.S. yields

Published 2019/03/19, 04:57
Updated 2019/03/19, 05:00
© Reuters.  Nikkei edges lower as exporters weak; but financials gain on U.S. yields
USD/JPY
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JP225
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8725
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* Topix volume low as investors on sidelines before Fed

* Japan Display soars after Effissimo eager to offer engagement

By Ayai Tomisawa

TOKYO, March 19 (Reuters) - Japan's Nikkei edged lower on Tuesday as investors took profits on exporters' stocks, but losses were capped by gains in financials which were helped by rising U.S. yields.

Most investors stayed on the sidelines, however, while they await the U.S. central bank's latest policy decision after a two-day meeting starting later in the day.

The Nikkei share average .N225 was down 0.3 percent at 21,528.38 points by the midday break.

Exporters lost ground as the yen firmed against the dollar, with Tokyo Electron 8035.T dropping 1 percent and Panasonic Corp 6752.T falling 0.8 percent after gaining the day before.

The dollar slipped 0.1 percent to 111.27 yen JPY= , extending its drop to a third session.

On the other hand, insurers and banks, which hunt for higher yielding assets such as foreign bonds, were bought. MS&AD Insurance 8725.T added 1.3 percent and Dai-ichi Life 8750.T soared 1.7 percent, while Sumitomo Mitsui Financial Group 8316.T rallied 0.9 percent.

A lack of news from U.S.-China trade talks also dampened activity.

"We've been seeing low volume recently and it's because most news has been priced into the market," said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center.

"The next catalyst will likely be full-year earnings but until then, activity may stay calm."

On Monday, the Topix's volume was 1 billion yen, the lowest in 1-1/2 weeks.

Investors expect the U.S. Federal Reserve will reinforce its dovish approach toward further interest rate hikes. Japan Display Inc 6740.T soared 7.3 percent after Singapore-based fund Effissimo said in a filing that its purpose of owning Japan Display shares had changed to making suggestions to management and possibly raising shareholder proposals, from a previous aim of pure investment.

The stock was the biggest percentage gainer on the board.

The broader Topix .TOPX dropped 0.3 percent to 1,608.90.

(Editing by Kim Coghill)

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