Japan shares slip on warning forward of earnings

TOKYO: Japanese shares pulled back on Monday from a near six-week high hit in the previous session, as caution set in before corporate earnings results that are likely to reveal the damage wrought by the novel coronavirus pandemic.

The Nikkei index settled down 1.15% at 19,669.12, led by declines in the consumer discretionary and healthcare sectors.

Companies linked to consumer spending took a hit as Japanese officials encourage more people to stay at home to limit the spread of the novel coronavirus.

The healthcare sector initially got a boost as companies raced to test medicines to deal with the pandemic, before giving up some of these gains as nervous investors started to lock in profits.

Chugai Pharmaceutical Co and electronics maker Omron Corp will release their earnings on Thursday, while semiconductor testing equipment maker Advantest Corp and industrial robot maker Fanuc Corp will post their results on Friday.

Investors will closely examine the results and forecasts to gauge the health of corporate Japan.

Companies across the globe are struggling with sudden collapse in demand and manufacturing disruptions due to the pandemic.

Some investors in Japan are on edge after the government last week extended a state of emergency to cover the entire country because of steadily rising virus cases.

“A lot of companies are simply going to forego giving forecasts due to the coronavirus, and a lot of investors are prepared to accept that,” said Hideyuki Ishiguro, senior strategist at Daiwa Securities in Tokyo.

“There are still downside risks in Japan, because infections are rising and the measures we’ve taken are not as strict as other countries’ measures.”

Also weighing on investor sentiment was data showing Japan’s exports slumped the most in nearly four years in March, highlighting the damage the pandemic has inflicted on global trade.

On the Nikkei index, there were 71 advancers on the Nikkei index against 152 decliners.

The largest percentage losers in the index were telecom infrastructure provider Comsys Holdings Corp, down 4.17%, followed by Chugai Pharmaceutical, losing 3.88%, and rival drugs maker Daiichi Sankyo Co Ltd, down by 3.87%.

The largest percentage gainers in the index were semiconductor manufacturing equipment maker Screen Holdings Co Ltd, up 4.89%, followed by digital imaging and printing company Konica Minolta Inc, gaining 3.87%, and Taiheiyo Cement Corp, up by 3.52%.

The broader Topix index fell 0.7% to 1,432.41.

The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.07 billion, compared to the average of 2.02 billion in the past 30 days.

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