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Japan stocks fall on subdued earnings, grim gaming sector outlook

Aug 9 (Reuters) - Japanese stocks fell on Tuesday, hit by weak quarterly earnings by heavyweights and lowered expectations for the video game market, while investors awaited key U.S. inflation data.

Japan’s Nikkei share average was down 0.85% and on course to snap a four-day rally. It closed at 28,009.35 by the end of the morning session after dipping below the 28,000 psychological barrier.

The broader Topix fell 0.73%.

“It looks like a lot of investors don’t want to make moves before Wednesday’s U.S. Consumer Price Index (CPI) data release,” a domestic securities broker said, adding that the market tends to be quiet during Japan’s ongoing summer high school baseball tournament.

Of the Nikkei’s 225 components, 154 made losses, four were flat, and 67 made gains.

Technology was the worst performing sector, down 1.96% overall. The only sector to gain was energy, up 1.83%.

Japan Steel Works Ltd and Tokyo Electron Ltd lost the most at 9.33% and 8.43%, respectively, following the release of their quarterly earnings on Monday.

SoftBank Group Corp also fell on its earnings, having announced job cuts at its Vision Fund investing arm after a record quarterly loss.

Japan’s video game giants Sony Group Corp and Nintendo Co Ltd already released their results in previous weeks, but nonetheless appeared to be affected by graphics chip maker Nvidia’s overnight earnings that pointed to weakness in the gaming market.

Sony fell 2.81%, while Nintendo lost 1.04%. Nvidia’s earnings were a catalyst that sent the S&P 500 index into negative territory overnight, NAB’s director of economics, Tapas Strickland, wrote in a note.

Security software company Trend Micro Inc was the best performer, rising 9.79% on the news that activist investor ValueAct Capital Partners built an 8.7% stake. (Reporting by Sam Byford and Tokyo markets team; Editing by Rashmi Aich)

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