The Nikkei share average dipped on Wednesday on the first day of the Japanese new fiscal year. As investors braced for a global recession, the sharp cuts in corporate earnings and dividend payouts.
The Bank of Japan’s “tankan” corporate survey showed Japanese manufacturers turned pessimistic for the first time in seven years.
Yoshihiro Ito, a senior strategist at Okasan Online Securities gave response to the drop of the Japanese share. He said, “although the data was better than expected, it reflected the impact of coronavirus on the economy.”
“We are likely to see a torrent of earnings downgrades and dividend cuts ahead of earnings announcements,” he added.
The Nikkei fell 1.00% to 18,728.65. Meanwhile, the broader Topix lost 0.68% to 1,393.72. On the other hand, chemical and cosmetics firm Kao Corp dropped 5.1% while mobile carrier NTT DoCoMo lost 3.8%.
Defensive shares that performed relatively well in recent weeks were among the worst performers. The reason was investors took profits at the start of the new financial year.
Acccording to Aljazeera, the lost affected to the Japan railway and the performance of the airlines. Due to the coronavirus outbreak, some people are fear and they choose to stay at home.
The lost affected to East Japan Railway. 3.4% on mounting speculation that the Japanese government may impose tougher restrictions such as a lockdown in Tokyo to deal with rising coronavirus infections in the capital.
Airlines in Japan also impacted because of the pandemic. They were the worst performing sector among the Tokyo Stock exchange’s 33 industry subindexes, falling 4.5%. ANA Holdings lost 6.5%.
Fujifilm bucked the trend to rise 3.5% as the clinical test of its Avigan anti-flu drug for COVID-19 patients started.
