Japan’s Nikkei share average languished on Thursday, weighed down by a stronger yen and plagued by uncertainty about the outlook for Japanese monetary policy.
The Nikkei was down 0.2 per cent at 16,971.05 by midday.
“The market’s seeing many sell orders on the back of a drop in US markets, and a lack of any news to drive buying in Tokyo,” said Hiroki Allen, chief representative of Superfund Japan in Tokyo.
“Even the announcement of the new iPhone 7 is not enough to encourage the usual buying of Apple’s suppliers in the Japan market,” Allen said.
Apple iPhone 7
The Dow Jones industrial average and the S&P 500 both slipped overnight, though the Nasdaq Composite nudged up to a new closing high after Apple unveiled an iPhone 7 with high-resolution cameras and no headphone jack at its annual launch event on Wednesday.
Apple’s biggest surprise was the debut of a three-decade-old Nintendo game franchise, Super Mario Bros, on the smartphone. The announcement of the new game, Super Mario Run, powered Nintendo’s shares up 13 per cent by midday in Tokyo trading, on hopes of another mobile gaming hit for the Japanese company following the wildly popular Pokemon Go.
Shares of online gaming firm DeNA Co Ltd , which teams up with Nintendo to develop and operate gaming apps, jumped 13 per cent by midday after hitting five-year highs.
But a stronger currency took its toll on overall sentiment. The dollar sank 0.1 per cent to 101.68 yen after plumbing 101.20 on Wednesday, its lowest level since August 26.
Japan monetary policy
Investors awaited a speech by Bank of Japan Deputy Governor Hiroshi Nakaso at 0430 GMT, for any signals about the outlook for Japan’s monetary policy. The BOJ is expected to unveil the results of a comprehensive policy review it promised in July, at the end of its next two-day meeting on September 20-21.
Adding to the uncertainty, the US Federal Reserve will meet the same week, and could provide more clues about US monetary policy. However, a recent spate of disappointing data has made it unlikely that the US central bank will decide to raise interest rates sooner rather than later.
“There’s still a lot of time between now and the Fed and BOJ meetings, and it’s hard for investors to move ahead of them, with so many unknowns,” said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
Data released earlier in the session showed Japan’s economy grew faster over April-June than initially estimated, with upward revisions to capital expenditure and inventories. But the lack of a strong growth driver is seen undermining momentum for the rest of this year.
Separate data from the Ministry of Finance showed Japan’s current account surplus stood at ¥1.94 trillion in July as the trade balance swung to a surplus, though the figure fell short of economists' median forecast for a surplus of ¥2.09 trillion.
The broader Topix slipped 0.2 per cent to 1,346.48.
The JPX-Nikkei Index 400 was 0.4 per cent lower at 12,076.34.