Mon, 10 Aug 2020

TOKYO, July 30 (Xinhua) -- Tokyo stocks closed lower Thursday as early gains made on the back of the U.S. Federal Reserve's pledge to maintain low interest rates were reversed due to concerns over the rising cases of coronavirus infections in Japan.

The 225-issue Nikkei Stock Average lost 57.88 points, or 0.26 percent, from Wednesday to close the day at 22,339.23.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, dropped 9.57 points, or 0.62 percent, to finish at 1,539.47.

Investor sentiment was positive in early trade following the Fed opting to stay pat on its monetary policy to help underpin the economy amid the pandemic, with Federal Reserve Chair Jerome Powell saying that all tools would be used to support a recovery.

Not downplaying the severity of the United States' economic predicament as a result of the pandemic, Powell said the country is facing the most severe economic downturn "in our lifetime."

"The path forward for the economy is extraordinarily uncertain, and will depend in large part on our success in keeping the virus in check," he said. "Indeed, we have seen some signs in recent weeks that the increase in virus cases, and the renewed measures to control it, are starting to weigh on economic activity."

But a statement from the Federal Open Market Committee was particularly well received by investors here, local brokers said, which helped incentivize the market in early play.

"The pandemic poses considerable risks to the economic outlook over the medium term and the federal funds rate would remain near zero until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals," the statement said.

The pace of selling increased in later trade, however, as investors were once again spooked by rising coronavirus infections in Japan with some prefectures outside Tokyo reporting new daily record figures.

This fueled fears of a resurgence of the virus nationwide and the possibility of a second wave of infections, market analysts said.

"Fears spurred by the pace of increase in domestic infections weighed on the market. Investors are worried the uptrend will slow the country's economic recovery from the pandemic," Makoto Sengoku, a market analyst at the Tokai Tokyo Research Institute, was quoted as saying.

Possible plans by the Tokyo Metropolitan government to urge restaurants, bars and karaoke shops to shorten their opening hours weighed on the market mood, as the number of daily new cases surpassed 1,000 in the capital a day earlier, traders here said.

"Sentiment sagged after news about fresh business restrictions in Tokyo hit the market. Investors were also concerned about record infection numbers in Tokyo today," Toshikazu Horiuchi, a broker at IwaiCosmo Securities, was quoted as saying.

By the close of play, air transportation, electric power and gas, and land transportation issues comprised those that declined the most.

ANA Holdings dropped 2.8 percent after the airline reported a record net loss for the first quarter through June owing to slumping patronage amid the pandemic.

Kao Corp. declined 5.2 percent, as the cosmetics company cut its profit forecast for the year through March.

Isetan Mitsukoshi Holdings tumbled 10.2 percent, after the department store operator projected the previous day a group net loss for the fiscal year through March.

J. Front Retailing also closed in negative territory, losing 5.1 percent, while another department store operator Takashimaya ended the day 4.0 percent lower.

Bucking the downward trend, Nomura Holdings jumped 4.5 percent as it reported a solid quarterly profit, while SoftBank Group gained 2.4 percent, after announcing a new COVID-19 saliva testing center.

Issues that fell outpaced those that rose by 1,321 to 769 on the First Section, while 81 ended the day unchanged.

On the main section on Thursday, 1.300 billion shares changed hands, rising from Wednesday's volume of 1.186 billion shares.

The turnover on the penultimate trading day of the week came to 2.265 trillion yen (21.557 billion U.S. dollars).

More Massachusetts News

Access More

Sign up for Massachusetts State News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!