TOKYO, Aug 5 (Reuters) – Japanese shares retreated from a one-week high on Wednesday as downbeat earnings reports underscored the economic blow from the COVID-19 pandemic and a firmer yen weighed on exporters.
The Nikkei index ended down 0.26% at 22,514.85, with the telecommunications and the consumer discretionary sectors leading the declines.
The broader Topix fell 0.04% to 1,554.71.
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The Nikkei has rallied 37% from this year’s low hit in March but has recently struggled to break above resistance around 23,000 as investors turn more cautious in the face of rising coronavirus cases at home and elsewhere
“This is a retrenchment because the earnings so far have not been that good,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co
“There’s a sense that Japanese companies are lagging behind American and European corporate earnings.”
Highlighting the impact of the pandemic, Mitsubishi UFJ Financial Group Inc (MUFG), Japan’s largest lender by assets, said on Tuesday its net profit more than halved
Shares in MUFG fell 0.17% on Wednesday
Sony Corp, another major company to report earnings on Tuesday, ended 1.61% lower as worries over its future earnings eclipsed better-than-expected results from the company
More Japanese companies are set to report earnings in the coming days
There were 99 advancers on the Nikkei index against 122 decliners
The underperformers among the top 30 core Topix names were SoftBank Group Corp, down 4.19%, followed by East Japan Railway Co, losing 2.44%
The stocks that gained the most among the Topix 30 were Hitachi Ltd, up 3.2%, followed by Nintendo Co Ltd , which rose 3.17% before its earnings on Thursday
The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.2 billion, compared with the average of 1.2 billion in the past 30 days. (Reporting by Stanley White; Editing by Aditya Soni)