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Nikkei drops on gloomy BOJ tankan, COVID-19 concerns

Published 01/07/2020, 08:10
Updated 01/07/2020, 08:12

TOKYO, July 1 (Reuters) - Japanese shares ended lower on
Wednesday as the Bank of Japan's quarterly corporate survey
showed business mood dropped to the worst level in 11 years,
while the continued spread of COVID-19 cases in Tokyo also
sapped risk appetite.
The benchmark Nikkei average .N225 ended 0.75% lower at
22,121.73.
The Bank of Japan's tankan survey showed the mood among big
manufacturers declined to minus 34 last month from minus 8 in
March.
The BOJ survey also indicated that big firms plan to raise
capital expenditure by 3.2% in the current fiscal year through
March 2021, higher than initially expected.
Investor sentiment was dealt another blow after Japan's
Chief Cabinet Secretary Yoshihide Suga said the coronavirus
state of emergency could be re-imposed in a worst case scenario.
Tokyo has sought to keep new COVID-19 cases below 20 a day
since Japan lifted a state of emergency in late May, but has had
six straight days of more than 50 new cases, as of Wednesday.
E-mini futures for the S&P 500 .Esc1 were last quoted down
0.47%, further pressuring Japanese shares.
All of the 33 sector subindexes on the Tokyo exchange traded
in the red. Pharmaceutical .IPHAM.T and textile .ITXTL.T
stocks declined the most, falling more than 2% each.
Automobile shares weakened despite the softer yen, as the
BOJ survey indicated sentiment among large automobile
manufacturers declined to minus 72 from minus 17 in March.
Suzuki Motor Corp 7269.T dropped 4.51%, Honda Motor Co Ltd
7267.T fell 2.03% and Nissan Motor Co Ltd 7201.T declined
1.63%.
The broader Topix .TOPX dipped 1.29% to 1,538.61, its
lowest since mid-June.

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