Tokyo stocks slip despite energy gains

Japan’s benchmark Nikkei index declined on Tuesday for the first time in three trading days as investors turned cautious after Monday’s solid gains, taking profits ahead of the FOMC meeting on Wednesday at which the US Federal Reserve is expected to cut rates.

A lack of trading themes in Japan contributed to directionless markets.

The Nikkei dropped 0.3 per cent to 16,651.01 while the Topix was essentially flat, up 0.04 per cent at 1,607.21.

Amid a lack of confidence in the market’s ability to extend gains, problems facing one major company – Takeda Pharmaceutical – had a disproportionately large impact on sentiment.

Takeda was hammered after it appeared there could be a delay in approval for Lipitor, its cholesterol-lowering drug, which is a key product.

Japan’s largest drugs group lost the maximum daily amount allowed, falling 12 percent, or Y1,000, to Y7,060 after US health authorities recommended it stop some trials of Lipitor.

Falling orders for semiconductor-making equipment in September pushed Advantest and Tokyo Electron lower. This is the seventh consecutive month of lower demand for semiconductor-making equipment.

Advantest dropped 3 per cent to Y3,120 and Tokyo Electron slipped 0.6 per cent to Y6,680. Disco declined 2 per cent to Y6,810.

Nippon Steel lost 1.3 per cent to Y777 after reporting a weaker-than-expected rise in first-half profits.

Property companies, however, notched healthy gains on speculation that they would report strong earnings.

Sumitomo Realty & Development rose 3.6 per cent to Y4,040 after a newspaper report that it was likely to beat its half-year forecast. Mitsubishi Estate benefited from Sumitomo’s bullish outlook, surging 5.6 per cent to Y3,410.

Energy stocks got a boost from sharply higher oil prices. Inpex Holdings, Japan’s top oil developer, rose 1.6 per cent to Y1,29m and Nippon Oil, the country’s leading refiner, gained 1.6 per cent to Y1,039.

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