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Japan shares edge up as investors await U.S. jobs data; banks under pressure

Published 04/10/2019, 07:43
Updated 04/10/2019, 07:50
© Reuters.  Japan shares edge up as investors await U.S. jobs data; banks under pressure

By Tomo Uetake

TOKYO, Oct 4 (Reuters) - Japanese shares edged up on Friday

after a sharp fall the previous day and ahead of key U.S. job

data, but financials came under pressure as a soft U.S. service

sector survey fanned growth worries and pulled Treasury yields

lower.

The benchmark Nikkei average .N225 rebounded 0.3% to

21,410.20 points, after shedding 2% the previous day.

But it posted the biggest weekly loss in two months, down

2.1%.

The broader Topix .TOPX added 0.3% to 1,572.90 but ended

down 2% on the week.

On Thursday, the survey from the U.S. Institute for Supply

Management (ISM) showed its non-manufacturing activity index

falling to the lowest level in more than three years in

September, and far below expectations. The downbeat U.S. economic news adds to a set of weak data

earlier in the week, and has deepened fears that the U.S.-China

trade war is starting to hurt growth in the world's biggest

economy, resulted in Treasury yields dropping across maturities.

In Tokyo, financial stocks came under pressure, with banking

.IBNKS.T and insurance .IINSU.T sectors among the worst

performers, down 0.9% and 0.5%, respectively.

Lower U.S. interest rates squeeze banks' lending margins and

interest income as Japanese banks and insurance companies have

stepped up investments in the United States in recent years.

Another interest rate-sensitive area, the TSE REIT index

.TREIT climbed 1.1% to hit its highest in more than 12 years

as falling bond yields have spurred demand.

Elsewhere, Apple-related electronic parts makers jumped

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after the Nikkei business daily reported Apple AAPL.O has told

suppliers to increase their production of its latest iPhone 11

range by up to 10%, citing sources. Murata Manufacturing 6981.T climbed 1.9%, Alps Alpine

6770.T gained 1.3% and Minebea Mitsumi 6479.T soared 2.7%.

"Some domestic players seem to be ready to buy on dips but

most of them are on the sidelines ahead of a key U.S. jobs

report that could help determine whether the Federal Reserve

cuts interest rates further," said Yasuo Sakuma, chief

investment officer at Libra Investments.

The data later on Friday is forecast to show the U.S.

economy added 145,000 new jobs in September, more than 130,000

in the previous month. (Editing by Shri Navaratnam & Kim Coghill)

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