Japan stocks start year in red as Tokyo braces for state of emergency

By Stanley White
TOKYO, Jan 4 (Reuters) - Japanese shares ended lower on
Monday after Prime Minister Yoshihide Suga said he is
considering a state of emergency for Tokyo and surrounding
prefectures to contain a spike in local coronavirus infections.
The Nikkei 225 Index .N225 ended down 0.68% at 27,258.38
in its first trading session of 2021 - the biggest daily decline
in two weeks. The broader Topix .TOPX fell 0.56% to 1,794.59.
Shares of airlines, transport companies, real estate firms
and retailers fell on fears that travel restrictions and shorter
business hours will curb consumer spending and hurt the services
sector.
Japanese shares rallied in the final days of last year to a
30-year high due to hopes that the approval of coronavirus
vaccines would ramp up the global economy's recovery from the
pandemic, but a record number of cases in Tokyo and surrounding
cities has caused investors to temper their optimism.
"There could be a small correction to 26,000 or 25,500,"
said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ
Kokusai Asset Management.
"Companies related to services are getting hurt, but
manufacturers focused on overseas demand should continue to do
well."
The underperformers among the Topix 30 were Central Japan
Railway Co 9022.T down 2.74%, followed by Tokio Marine
Holdings Inc 8766.T losing 1.77%.
The stocks that gained the most among the top 30 core Topix
names were Nippon Telegraph and Telephone Corp 9432.T up
2.57%, followed by Daiichi Sankyo Co Ltd 4568.T rising 2.26%.
Suga on Monday reiterated a request for some businesses to
close early, but on the positive side he said the rollout of
vaccinations could start as soon as February-end. There were 37 advancers on the Nikkei index against 185
decliners.
The volume of shares traded on the Tokyo Stock Exchange's
main board .TOPX was 0.87 billion, compared with the average
of 1.2 billion in the past 30 days.