Nikkei drops from 16-month peak before US CPI data; Toyota earnings loom
Yahoo Finance · 10 May 604 Views

TOKYO, May 10 (Reuters) - Japan's Nikkei share average slipped from a 16-month peak on Wednesday, as cautious investors took profits ahead of crucial U.S. inflation data later in the day that could influence the path for Federal Reserve 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 auto parts supplier NTN Corp tumbled in excess of 10%.

The reporting season reaches a crescendo this week, and headlining the companies reporting during the trading day on Wednesday will be heavyweight automaker Toyota Motor, which was last down 0.37%.

The Nikkei declined 0.44% to 29,113.33 as of the midday break, finishing close to the morning session's low. On Tuesday, it had surged 1% to close at its highest level since January 2022.

The broader Topix fell 0.51% to 2,086.85, also near the day's low. It closed at its highest since September 2021 on Tuesday.

"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, adding that the earnings season has been a strong one so far, helping limit declines for Japanese stocks.

"Domestic earnings are certainly a key focus for the market this week, but so are U.S. inflation readings."

Close to 300 companies will report earnings on Wednesday, climbing to almost 500 on Thursday, and reaching a peak at more than 1,000 companies on Friday.

Strong earnings drove gains for Yokogawa Electic, which jumped 9.7%, and processed food company Nichirei Corp , which climbed 6.5%.

Trading company Mitsubishi Corp, which Berkshire Hathaway holds a stake in, also rose 3.9% on firm earnings.

Meanwhile, Mitsubishi Motors and Pacific Metals rounded out the top 3 Nikkei decliners, losing a little more than 9% each. 

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