Nikkei takes breather after Federal Reserve move
Japan's Nikkei share average edged down on Friday morning as investors booked profits before the long weekend, with trading subdued ahead of the outcome of a Bank of Japan meeting later in the day.
The BOJ is expected to maintain its commitment to ultra-easy monetary policy, barely a day after the U.S. Federal Reserve announced it will start to taper its massive stimulus from next month.
"The market moved passed a big event, so profit-taking is natural," said Kazuhiro Miyake, a chief strategist at Daiwa Securities, referring to the Fed taper decision.
"But there's more upside to the market as both macro funds which trade on a three-to-six month view and long-term investors who look at fundamentals are pouring money into the Japanese market."
Recent gainers retreated, with SoftBank Corp dropping 0.6 per cent and KDDI Corp falling 2.7 per cent. Brokerage firms Nomura Holdings dropped 0.8 per cent and Daiwa Securities Group shed 0.5 per cent.
The Nikkei dropped 0.4 per cent to 15,795.26 in mid-morning trade after rising 1.7 per cent to finish at 15,859.22 on the previous day, its highest close since December 2007. The benchmark rose 4.7 per cent between Tuesday and Thursday.
For the week, the index has risen 2.5 per cent.
With Japanese markets closed for a national holiday on Monday and many foreign investors away for the Christmas break, trading is expected to remain subdued through to year-end, analysts said.
Daiwa's Miyake expects the Nikkei go above the 16,000-mark by year-end.
The Topix fell 0.3 per cent to 1,259.08.
Exporters were mixed after a broad-rally on Thursday on the back of a weak yen. The dollar steadied at 104.29 yen, but still close to a five-year high of 104.37 yen touched in the wake of the Fed's announcement.
Nikon Corp rose 0.7 per cent, Sony Corp added 0.3 per cent, while Toyota Motor Corp shed 0.3 per cent.
Namco Bandai Holdings rose 1.7 per cent after UBS Securities upgraded its rating to 'buy' from 'neutral', citing growing game titles next year.
The Nikkei is up around 50 per cent this year, driven by Tokyo's aggressive fiscal and monetary stimulus aimed at pulling the world's third-largest economy out of two decades of stagnation. The benchmark is on track for its best yearly rise since 1972.
Copyright Thomson Reuters 2013
