TOKYO: Japanese shares fell on Friday, weighed down by a stronger yen, while investors took a cautious stance after the Nikkei crossed the psychologically important level of 38,000 this week.
The Nikkei fell 0.25% to 37,659.39 by the midday break, but is set to rise 0.4% for the week to mark its fifth straight weekly gain.
The broader Topix slipped 0.19% to 2,733.8 and is on course for a 0.2% weekly gain.
“The Nikkei rose to 38,000 from around 31,000 in just over a month. Most investors don’t think the index will keep rising at the same pace,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
The Nikkei has fully recouped its losses since US President Donald Trump’s April 2 tariff announcements, rising more than 20% from its 1-1/2-year low hit on April 7.
The yen rose 0.3% to 145.2 against the dollar on Friday after downside surprises on US economic data this week cemented bets of more Federal Reserve rate cuts this year.
A stronger yen typically weighs on exporter shares by reducing the value of overseas earnings when converted back into Japanese currency.
Chip-related Tokyo Electron and Advantest fell 3.21% and 2.62%, respectively, to drag the Nikkei the most. Sony Group slipped 2.96%.
Bucking the trend, Mitsubishi UFJ Financial Group rose 1.53% after announcing a share buyback worth about 250 billion yen ($1.72 billion).
Peers Sumitomo Mitsui Financial Group and Mizuho Financial Group fell 1.96% and 1.94%, respectively, even as the three banking groups posted record annual net profit in the last financial year.
Japan’s Nikkei tracks US peers higher, climbs nearly 1%
“Share buybacks are a strong tailwind for stock prices, and Japanese firms are set to buy back as much as 8.5 trillion yen worth of shares in April and May alone.
The Nikkei’s recovery will continue,“ said Tokai Tokyo’s Suzuki.
Phone company KDDI also rose 0.6% after announcing as much as 400 billion yen ($2.76 billion) worth of share buybacks.
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