Tokyo stocks down in opening trade on profit-taking

Tokyo, June 1, 2016 (AFP) –

Tokyo stocks opened lower Wednesday as profit-taking set in after five straight positive sessions, following a lacklustre lead from Wall Street .

Equity markets in the US and Europe mostly fell Tuesday ahead of a heavy week of economic news, including the European Central Bank meeting and US May jobs report, analysts said.

“Investors may take profits after Japanese stock markets rose for five days,” Chihiro Ohta, a senior strategist at SMBC Nikko Securities, told Bloomberg News.

“Now is not the time to buy actively. We have events such as… the ECB policy decision and the US jobs data coming up.”

The benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 0.80 percent, or 137.76 points, to 17,097.22 in opening deals, after notching up a five-session winning streak the previous day — its longest since the start of this year.

The broader Topix index of all first-section shares lost 0.71 percent, or 9.84 points, to 1,369.96.

Investors are now eyeing a decision from Prime Minister Shinzo Abe on delaying a consumption tax rise.

Tokyo was scheduled to raise the sales tax from eight percent to 10 percent in April 2017, to help pay down Japan’s massive national debt.

Abe is scheduled to hold a press conference in Tokyo later on Wednesday, where he is expected to announce a delay of two and a half years in raising the levy.

In share trading, Japanese mobile carrier SoftBank climbed on news that it will sell at least $7.9 billion of its stake in Chinese e-commerce giant Alibaba.

SoftBank will reduce its 32.2 percent holding in the Chinese company to about 28 percent with the sale, and use the proceeds to pay down its debts, the company said in a statement.

In early trading, its shares jumped 2.02 percent to 6,354 yen.

On currency markets, the dollar dropped to 110.61 yen from 110.73 yen Tuesday in New York.

On Wall Street, the Dow closed 0.5 percent lower and the S&P 500 lost 0.1 percent, while the tech-rich Nasdaq tacked on 0.3 percent.