Nikkei posts worst week in nearly 4 months as COVID-19 resurgence looms

TOKYO, July 31 (Reuters) - Japanese shares closed lower on
Friday as the safe-haven yen strengthened on dismal U.S. data,
while the resurgence of COVID-19 cases dampened hopes of a swift
economic rebound.
The Nikkei share average .N225 ended 2.82% lower at
21,710.00, the biggest daily loss since June 15.
The index was down 4.58% for the week, the worst since early
April. The 2.59% decline in July was its first monthly loss
since March.
The broader Topix .TOPX closed down 2.82% at 1,496.06,
hitting its two-month low and the biggest daily losses in four
months.
Market extended losses in the afternoon as Tokyo Governor
Yuriko Koike warned that Japan's capital could declare a state
of emergency if the coronavirus situation deteriorated further,
after fresh infections jumped by a record daily high of 463.
Data on Thursday showed that the U.S. economy contracted by
32.9% in the second quarter and suffered the deepest decline
since the Great Depression, while weekly jobless claims
increased 12,000 to 1.434 million. Worries over a delay in economic recovery kept the U.S.
dollar under pressure, down briefly against the yen at 104.195
yen JPY= , a 4-1/2 month low.
Analysts said market sentiment was also overshadowed by
concerns over tepid corporate earnings.
"Companies with weak results are standing out, although not
all corporate earnings are bad," said Yutaka Masushima, market
analyst at Monex Securities in Tokyo.
"It's also clearer that the spread of the coronavirus will
prolong, so it'd be difficult to chase shares higher."
Shares of Advantest Corp 6857.T plunged 14.93% at a
daily-limit low, after the semi-conductor firm announced a 23.3%
drop in its operating profit forecast for the year through
March.
Panasonic Corp 6752.T dropped 13.29% after the company
said it expects annual profit to halve this financial year.
Among gainers, SoftBank-backed online fashion retailer Zozo
Inc 3092.T soared 21.19% to a daily-limit high after strong
earnings.