TOKYO: Tokyo’s benchmark index was flat Wednesday morning, taking a breather after closing at a fresh three-month high the previous day, as markets await a European Central Bank meeting and key US jobs data.
The Nikkei 225 opened lower, despite a positive lead from Wall Street, which reacted to a mixed bag of US economic data, including strong online holiday retail sales and weak manufacturing figures.
The Institute for Supply Management purchasing managers’ index for the manufacturing sector dropped to 48.6 in November, marking the first contraction in three years.
The disappointing result throws the focus on US employment figures on Friday as the Federal Reserve moves closer to a long-awaited interest rate hike.
Investors are also eyeing a speech in Washington by Fed Chair Janet Yellen later in the day for additional hints about the pace of a rate increase.
“The ISM manufacturing figures were terrible. They were at a level indicating a recession,” Chihiro Ohta, general manager of investment information at SMBC Nikko Securities, told Bloomberg News.
“The market’s focus is shifting to the pace of rate hikes in the US. That pace is likely to be gradual as the American economy doesn’t seem to be as strong as expected.
“The Nikkei 225 rose above 20,000 yesterday, but we’re not in a situation where we want to make large purchases,” Ohta added.
At the break, the Nikkei was down 0.05 percent, or 10.28 points, to 20,002.12, while the broader Topix index of all first-section shares rose 0.33 percent, or 5.32 points, to 1,607.27.
Also in focus is a European Central Bank meeting Thursday that could see it unleash further monetary easing to boost growth in the sagging eurozone economy.
In share trading, Toyota rose 0.80 percent to 7,824 yen, banking giant Mitsubishi UFJ gained 0.65 percent to 809.9 yen while Sony was down 1.58 percent to 3,176 yen.
Market heavyweight Fast Retailing fell 1.20 percent to 49,290 yen in morning trade.
Energy giant JX Holdings edged up 0.36 percent to 506 yen as it announced it was in merger talks with smaller rival TonenGeneral Sekiyu.
