TOKYO: Japanese stocks fell for the first time in in 13 days as concerns the U.S. is inching closer to raising interest rates prompted investors to take profit on the Topix index’s longest rally since 2009.
Banks and rubber product-makers, two of the largest beneficiaries during the rally, were among the biggest decliners today. Bridgestone Corp. slumped 3.3 percent, while Mitsubishi UFJ Financial Group Inc. was the heaviest drag on the Topix index, dropping 2.3 percent. Japan Tobacco Inc. fell 1.8 percent after its Canadian subsidiary was ordered to pay C$2 billion ($1.6 billion) in lawsuits. NTT Docomo Inc. jumped 3.9 percent after the Nikkei newspaper reported the mobile carrier plans to boost shareholder returns through buybacks and cost reductions.
The Topix index lost 0.3 percent to 1,674.21 at the close in Tokyo after rallying 5.5 percent in the 12 days through yesterday. The Nikkei 225 Stock Average lost 0.1 percent to 20,543.19. The yen traded at 124.64 per dollar after weakening 0.5 percent yesterday as U.S. manufacturing data indicated renewed strength in the world’s largest economy.
“After so many continuous days of gains, certain parts seems stretched,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. “The ISM figures offer support to Federal Reserve Chair Yellen’s desire to hike rates.”
The Institute for Supply Management’s U.S. factory index rose to 52.8 in May from an almost two-year low 51.5 in April, government figures Monday showed. A separate report revealed construction outlays gained in April by the most since May 2012, while another showed little change in personal spending.
The greenback and Treasury yields advanced after the data, with investors awaiting additional economic reports this week, including the trade balance and payrolls. The Fed is weighing the data as it determines when to raise benchmark interest rates for the first time since 2006.
