Nikkei dips as political uncertainties blunt risk appetite

By Hideyuki Sano
TOKYO, Aug 18 (Reuters) - Japan's Nikkei share average
dipped on Tuesday, slipping further away from a near-six-month
peak touched last week, as political uncertainties around the
world sapped investors' risk appetite.
Nikkei share average .N225 lost 0.20% to 23,051.08,
inching away from its Friday peak of 23,338, its highest level
since late February. The broader Topix .TOPX ended up 0.06% at
1,610.85.
The yen's rise fuelled profit taking in a market saddled by
its already high valuation, rising U.S.-China tensions and
uncertainties over U.S. fiscal stimulus.
"The earnings season is over and they weren't really
supportive of a strong market rally we have seen. The market has
been just bolstered by rally in Wall Street shares," said Masato
Kogure, leader of execution group for institutional sales at
Tokai Tokyo Securities.
Net profits of listed Japanese firms fell more than 50% from
a year earlier in the previous quarter, with only pharmaceutical
and food companies expecting profit growth in the financial year
to next March, analysts at Okasan Securities said in a report.
The Topix traded at 16.8 times profit forecast by analysts,
near the highest level in a decade.
Some market players also said the news that Japanese Prime
Minister Shinzo Abe underwent a medical check-up in hospital on
Monday raised worries about his health issues and weighed on the
sentiment given his reflationary policy has been a major support
for the market. Airline shares .IAIRL.T tumbled 1.7% after they reported
weak passenger traffics during the "Obon" holiday period earlier
this month due to a rise in domestic COVID-19 infections.
Banks .IBNKS.T fell 1% as U.S. bond yields slipped while
the yen's rise against the dollar hit exporters, including
automakers that surged earlier this month.
Mazda Motor 7261.T dropped 2.3%, while auto parts maker
Denso 6902.T shed 2.2%.
Bucking the trend, the index of Mothers start-up shares
.MTHR climbed 3.4% to its highest level since October 2018, on
buying by individual investors.

(Editing by Rashmi Aich and Amy Caren Daniel)