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Nikkei pauses as profit-taking hits transport stocks

A man looks at an electronic quotation board displaying stock prices of the Tokyo Stock Exchange in Tokyo on May. 26, 2020. (File photo/AFP)
A man looks at an electronic quotation board displaying stock prices of the Tokyo Stock Exchange in Tokyo on May. 26, 2020. (File photo/AFP)
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27 May 2020 03:05:20 GMT9
27 May 2020 03:05:20 GMT9

Japan's benchmark stock index Nikkei paused on Wednesday after hitting a 2-1/2-month high in the last session, as investors locked in profits from recent strong gains in transport companies.

The Nikkei average eased 0.02% to 21,266.23 by the midday break, after moving back and forth between positive and negative territories in morning trade. It gained 4.3% in the previous two sessions to hit its highest level since March 5.

Japanese Prime Minister Shinzo Abe on Monday lifted the coronavirus state of emergency in greater Tokyo and northern island of Hokkaido, ending the restrictions nationwide as businesses begin to reopen.

Investors cheered the decision as getting greater Tokyo, which accounts for one-third of Japan's gross domestic product, back on its feet is vital to the country's overall economic recovery, resulting in a rally in air and land transport companies this week.

West Japan Railway dropped 3.3% and Central Japan Railway shed 2.6%, while ANA Holdings slipped 1.3% as investors moved to pocket profits from recent gains.

Tokyo-listed semiconductor-related companies also came under pressure amid rising tensions between the United States and China.

Chipmaking gear manufacturers Tokyo Electron Ltd and Screen Holdings slid 4.0% each, and test device maker Advantest Corp fell 1.8%.

US President Donald Trump said late on Tuesday he was preparing to take action against China this week over its effort to impose national security laws on Hong Kong, but gave no further details.

The broader Topix edged up 0.2% to 1,538.20 by the recess, its highest midday level since March 3, with about two-thirds of 33 sector sub-indexes on the Tokyo exchange trading higher.

Reuters

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