Japanese shares dip as earnings fall short of investor expectations

TOKYO, April 27 (Reuters) - Japanese shares inched lower on
Tuesday as a slew of corporate earnings failed to meet
investors' high expectations for strong profit recovery and as
the country struggles with containing the COVID-19 pandemic.
The Nikkei share average .N225 fell 0.46% to 28,991.89,
while the broader Topix .TOPX shed 0.76% to 1,903.55. The
market did not react to the Bank of Japan's widely-expected
decision of keeping policy unchanged. Earnings have proved to be a drag on the market after the
Nikkei had rallied to a three-decade high earlier this year on
hopes of economic normalisation in the financial year that began
in April.
Dai-ichi Sankyo 4568.T fell 3.5% after the drugmaker gave
a lower-than-expected forecast for the current year to March,
while Hulic 3003.T lost 4.4% after the property developer
missed expectations. Even companies with relatively strong earnings and positive
surprises were not spared from sell-off, with camera and medical
equipment maker Canon 7751.T failing to keep earlier gains.
Canon ended down 1.3%, despite its annual operating profit
forecast topping market consensus. Online brokerage Monex 8698.T lost 1.5% even as it
reported a surge in profit due to the rise in bitcoin.
Those losses came after industry bellwether Yaskawa Electric
6506.T and Nidec 6594.T fell, despite relatively sound
earnings earlier this month.
"Shares in companies which reported positive earnings are
not rising. That means investors' expectations for corporate
outlook are too high," said Takatoshi Itoshima, strategist at
Pictet Asset Management.
Japan's unstable health conditions are also dampening the
mood after the government was forced to declare its third state
of emergency last week, only one month after it ended the
previous one while vaccine rollouts progressed at a snail's
pace.
Bucking the trend, NEC Networks & Systems 1973.T gained
4.8% on upbeat earnings.
Renewable energy firm Tess Holdings 5074.T jumped 18.7% in
its debut and closed 21.3% above the IPO price, becoming the
third most actively traded stock on the entire exchange.