Bank of Japan Governor Kazuo Ueda's comment to lawmakers
that it was too early to discuss a disposal of the central
bank's ETF holdings buoyed stocks briefly in the early
afternoon, before sellers came back in.
"Today, we're seeing the retracement of some of Tuesday's
strong rise, which has created an environment that's ripe for
profit taking," said Maki Sawada, a strategist at Nomura
Securities.
"Domestic earnings are certainly a key focus for the market
this week, but so are U.S. inflation readings."
The reporting season reaches a crescendo this week. Close to
300 companies report earnings on Wednesday, climbing to almost
500 on Thursday, and reaching a peak at more than 1,000
companies on Friday.
Toyota Motor rose as much as 2.5% after posting
favourable financial results mid-afternoon, but gains faded to
just 0.78% by the close.
(Reporting by Kevin Buckland; Editing by Rashmi Aich)
By Kevin Buckland
TOKYO, May 10 (Reuters) - Japan's Nikkei share average
dropped from a 16-month peak on Wednesday, as cautious investors
took profits ahead of crucial U.S. inflation data that could
influence the path for the Federal Reserve's monetary policy.
At the same time, domestic earnings continued to produce
outsized winners and losers, with department store operator
Marui Group surging as much as 21%, while Mitsubishi
Motors finished down 9.83% after forecasting a drop in
profit.
The Tokyo Stock Exchange's iron and steel subindex flipped from being the best performing sector in the
morning to the worst performer, after poor results from Nippon
Steel snowballed with earlier earnings disappointment
from Pacific Metals . Stocks in both companies dropped
in excess of 10% at their lowest points.
The Nikkei ended down 0.41% at 29,122.18. On
Tuesday, it had surged 1% to close at its highest level since
January 2022.
The broader Topix fell 0.55% to 2,085.91. It closed
at its highest since September 2021 on Tuesday.
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