Global Markets | Japan's Nikkei slips as post-earnings and election momentum fade

Japan's Nikkei ​share average fell on Tuesday ​as investors booked profits amid few fresh trading cues, ​while the post-election euphoria was ebbing and the earnings season was winding down. The Nikkei was down 0.4% to close at 56,566.49 on the day, and ‌declining 1.9% ⁠over four ⁠consecutive sessions. The broader Topix dropped 0.7% to 3,761.55. "There's just far too ​little in the way of catalysts," said Ryotaro Sawada, senior analyst at Tokai ​Tokyo Intelligence Laboratory. "We're seeing some technical profit-taking."

The Nikkei's 14-day relative strength index (RSI) is at 64, after touching 72 on Thursday. A level ​above 70 indicates gains have stretched too ⁠far.

Earnings season ‌is wrapping up in the world's fourth-largest economy, ​with a ​little over half of Nikkei constituents that have reported ⁠so far beating analysts' estimates, LSEG data showed.


The post-general-election ​rally from last week, following fiscal dove Prime ​Minister Sanae Takaichi's landslide victory, also appeared to fade, Sawada said.

The benchmark Nikkei index has climbed almost 13% this year so far on expectations of hefty spending and tax cuts from Takaichi, though some analysts say the gains have come too ‌fast.

Shares of SoftBank Group sank 5.1%, weighing on the index by 187 points. The technology and investment conglomerate's stock ​has been ​volatile, swinging between ⁠gains and losses over the past four sessions.

Steelmaker Japan Steel Works was the biggest percentage loser with a 5.4% drag, while information technology services ​firm NEC shed 4.7%.

Meanwhile, smartphone components manufacturer Taiyo Yuden's shares surged 8.7% to become Nikkei's best percentage gainer. Sumitomo Pharma jumped 7.2% after rising as much as 10.7%, while Murata MFG climbed 6.9%.

There were 100 advancers on the Nikkei index against 125 decliners.