Nikkei inches down, but stays near 9,900; yen eyed

By Aiko Hayashi

TOKYO (BestGrowthStock) – Japan’s Nikkei average lost steam on Tuesday after a three-day rising streak, struggling to break through key resistance just below 9,900 after Greece’s debt was downgraded to junk status.

Although not unexpected, the downgrade also weighed on Wall Street, with U.S. stocks (Read more about the stock market today. ) ending almost flat after earlier rallying on data showing euro zone industrial output surged in April for its biggest year-on-year percentage gain in almost two decades.

Market players in Tokyo said investors were in a wait-and-see mood after the Nikkei booked gains of nearly 5 percent in the past three days.

The 9,900 level is just above its 25-day moving average and after that 10,000 is also seen as important resistance after the benchmark broke sharply below that level in late May.

“The downgrade on Greece helped heighten fears about Europe’s debt problems,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

“If the yen were to strengthen, that would put pressure on market gains, particularly in shares of exporters.”

The benchmark Nikkei inched down 0.2 percent to 9,861.87. The Nikkei last traded above its 25-day moving average in late April.

But financial shares provided support to the market. Nomura Holdings, Japan’s top brokerage, climbed nearly 3 percent after Credit Suisse upgraded it to “outperform,” saying that concerns about the company have mostly been factored in and that valuations have also dropped to an attractive level.

The broader Topix slipped 0.1 percent to 877.30.

The euro soared on Monday on strong European economic data.

In early Asian trade, the euro was slightly weaker on the yen at around 111.70 yen and the U.S. dollar was also lower on the yen at around 91.54 yen.

Some blue-chip stocks dropped after recent gains. Digital camera maker Canon Inc fell 1.1 percent to 3,735 yen and industrial robot maker Fanuc Ltd shed 1.4 percent to 10,470 yen.

Nomura gained 2.8 percent to 546 yen.

The brokerage also upgraded Mizuho Securities and Daiwa Securities to “outperform,” noting that their price-to-book ratios were attractive.

Mizuho Securities jumped 4.1 percent to 229 yen and Daiwa climbed 2.8 percent to 406 yen.

Investing Tools

(Editing by Edwina Gibbs)

Nikkei inches down, but stays near 9,900; yen eyed