June 9, 2020 / 6:44 AM / a month ago

Japanese stocks off 3-1/2-month peak as firmer yen weighs on market

SYDNEY, June 9 (Reuters) - Japanese shares ended lower on Tuesday, slipping from a 3-1/2-month high hit in the previous session, as a firmer yen weighed on the market, with automakers and chip-related companies leading the decline.

The benchmark Nikkei average dipped 0.4% to 23,091.03. It had hit its highest closing level since Feb. 21 on Monday.

This was despite an overnight rally on Wall Street that took the Nasdaq Composite to a record high and the S&P 500 in positive territory for the year as expectations for a swift economic recovery from a coronavirus-driven slump increased.

“As some technical signs suggested the market is overheated, it’s no surprise if we feel top heavy in the short term,” said Takeo Kamai, head of executions services at CLSA in Tokyo.

The broader Topix eased 0.1% to 1,628.43, also off its highest closing since Feb. 21, with more than two-thirds of the 33 sector sub-indexes on the Tokyo exchange finishing lower.

Highly cyclical iron and steel, sea transport and non-ferrous metals were the worst three performing sectors on the main bourse.

In the currency market, the safe-haven yen rebounded from Friday’s 2-1/2-month low versus the U.S. dollar, with the dollar/yen trading at 107.915 yen, a level unseen for a week.

As a firmer yen hurts Japanese manufacturers’ profits made abroad when repatriated, shares of export-oriented automakers came under pressure, with Nissan Motor tumbling 4.8% and Mazda Motor falling 3.1%.

Taking a weak lead from their Wall Street peers, chip-making gear maker Tokyo Electron slid 2.7%, while test device maker Advantest shed 3.9%.

Bucking the overall market’s weakness, home improvement store operator Lixil Viva, a subsidiary of Lixil Group, advanced 3.2% after the Nikkei business daily reported Lixil Group plans to sell its majority stake in Lixil Viva to its domestic peer, Arcland Sakamoto.

Shares of Arcland Sakamoto soared 15.1%, while Lixil Group ended flat. (Reporting by Tomo Uetake; Editing by Sherry Jacob-Phillips and Rashmi Aich)

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