Japanese stocks edged up on Tuesday morning but a strong yen weighed on sentiment after Federal Reserve Chair Janet Yellen provided few clues on the timing of future US interest rate hikes.
The Nikkei edged up 0.2 per cent to 16,610.19 in choppy midmorning trade after earlier dipping into negative territory.
While Yellen remained upbeat about the overall US economic outlook and said the Fed would hike interest rate, she gave no fresh hints about timing, and called last month’s US jobs data “disappointing’’.
Traders said that investors were cautious about the exchange rate as they waited on the Fed’s June 14-15 policy review.
“Technical signs indicate that investors are bearish,” said Nobuhiko Kuramochi, a chief strategist at Mizuho Securities.
Over the last six months, the Nikkei benchmark index has traded below its 200-day moving average, a measure of a market’s long-term momentum. The 200-day moving average has shifted down since mid-December, and was at 17,769.17 as of Tuesday.
“Investors don’t want to chase the market higher in this kind of market environment,” Kuramochi said.
Mining shares outperform
On Tuesday, mining shares outperformed after oil prices rose on supply concerns, with Inpex Corp gaining 3.8 per cent and Japan Petroleum Exploration Co advancing 3.4 per cent.
Exporters were mixed, with Toyota Motor Corp shedding 0.2 per cent, Honda Motor Co rising 0.3 per cent and Panasonic Corp advancing 0.7 per cent as the dollar slipped 0.3 per cent to 107.31 yen.
Bucking the trend, Pigeon Corp jumped 15 per cent to a six-month high after the baby bottle maker’s Feb-April earnings cheered investors.
Its operating profit for the three months rose 3.8 per cent on the year, as domestic business saw strong performance thanks to inbound tourism demand, offsetting the adverse effect of the strong yen and weak retail sales in China.
The broader Topix rose 0.3 per cent to 1,336.72 and the JPX-Nikkei Index 400 gained 0.3 per cent to 12,046.02.