Nikkei retreats from 6-year high, set for best year since 1972

Thu Dec 26, 2013 8:44pm EST

* Nikkei falls 0.6 pct, coming off 6-year high
    * Takeda Pharma sags after ending fasiglifam development

    By Dominic Lau
    TOKYO, Dec 27 (Reuters) - Japan's Nikkei pulled back from a
six-year high on Friday as investors took profit with just two
trading days left for a year in which the benchmark has risen
more than 50 percent.
    The Nikkei shed 0.6 percent to 16,083.30 in
mid-morning trade after earlier hitting a six-year high of
16,232.69. The index was on track to end a seventh straight day
of gains, its longest such run since October.
    Takeda Pharmaceutical Co Ltd sagged 5 percent after
the drugmaker said it had decided voluntarily to end development
activities for fasiglifam, an investigational treatment for type
two diabetes, due to concerns over liver safety. 
    It was the second-most traded stock on the main board after
mobile operator SoftBank Corp, which climbed 1.5
percent, hitting a 13-1/2 year high and extending this year's
gain to 193 percent to become the second best performer in the
Nikkei.    
    Driven by Tokyo's aggressive fiscal and monetary stimulus,
the benchmark Nikkei has rallied nearly 55 percent, heading for
its best annual performance since 1972.
    Data on Friday showed Japan's industrial output posting the
third straight month of gains and core consumer prices
accelerating to a fresh five year high in November. As the
economy began to show some kind of life this year, foreign
investors' interest in Japanese shares has perked up. 
    They ploughed 838.3 billion yen ($8 billion) into Japanese
stocks in the week through Dec. 21, data from the Ministry of
Finance showed.
    So far this year, foreign investors have piled about 15
trillion yen into Japanese equities, compared with 2.13 trillion
for the whole of 2012.
    More gains were likely for the Japanese stocks into the New
Year. The $75 billion pension fund for Japan's civil servants
said late on Thursday that it has lowered its allocation to
Japanese bonds and raised weightings to domestic equities in an
easing of its ultraconservative investment strategy.
 
    Japanese retail investors were also expected to be more
aggressive in trading stocks next year, analysts said.
    "Japanese households have a lot of cash in their assets and
as inflation will speed up next year, we will see a shift from
their assets in cash deposit into riskier assets. Next year we
will see more active trading by individual investors," said Jun
Yunoki, an equity analyst at Nomura Securities. 
    
    But as stocks trended higher, the spread between the
dividend yield for the broader Topix index and the yield
on the benchmark 10-year Japanese government bond narrowed to
0.928 percentage point on Thursday, its lowest since September. 
    The Topix was down 0.2 percent to 1,277.19 on Friday
morning, with volume at 29 percent of full daily average for the
past 90 trading days.
    Investors locked in gains on some of stellar performers,
with Fast Retailing Co Ltd down 1.6 percent, Alps
Electric Co Ltd off 2.1 percent and ball-bearing maker
Minebea Co Ltd down 0.9 percent.
    As of Thursday, Minebea had risen more than 150 percent
year-to-date, while Fast Retailing, operator of casual fashion
chain Uniqlo, was up more than 100 percent.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.