Japanese shares edge up, tech shares rally

Published: June 21, 2018 14:26:05 | Updated: June 23, 2018 13:47:17

File Photo (Collected)

Japanese shares edged up on Thursday as concerns over China-US trade issues that hit markets early this week appeared to recede, while technology stocks rallied on the back of Nasdaq’s strong performance.

The market was also supported by expectations that dividend payouts would be reinvested as many Japanese firms pay their investors in late June, reports Reuters.

The Nikkei index rose 0.61 per cent to 22,693.04. But the broader Topix fell 0.12 per cent to 1,750.63, failing to sustain earlier gains of up to 0.34 per cent.

As the Topix significantly underperformed, the ratio of the two indexes, NT ratio, jumped to 12.96, its highest level since 1999.

Dragging down the Topix were bank shares, which dropped 2.3 per cent and were the second-worst sectoral performer on Thursday.

They have shed more than 15 per cent since the beginning of the year as the Bank of Japan’s negative interest rate policy has undermined their income.

Moreover, the sector was hurt by a report in the Nikkei newspaper that big Japanese banks’ cash advances to card holders at annual interest rates of 2-14 per cent are piling up irrecoverable debt.

The Nikkei said that bad debt tied to such cash advances climbed 13 per cent to a six-year high of roughly 140 billion yen ($1.27 billion) in fiscal 2017.

Sumitomo Mitsui Financial Group dropped 2.4 per cent, Mitsubishi UFJ Financial Group fell 2.2 per cent and Mizuho Financial Group shed 1.2 per cent.

Some tech shares gained ground. Softbank rose 4.6 per cent while Taiyo Yuden gained 4.3 per cent. TDK Corp climbed 3.3 per cent.

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