Tokyo shares close lower ahead of US job data

Tokyo shares closed down on Friday despite morning gains, as investors exercised caution ahead of US jobs data due later in the day.

Banking and pharmaceutical sectors were hardest hit by profit-taking, while auto and shipping shares gained ground. Tech shares continued to be dragged down by declines on the US Nasdaq market.

The Nikkei 225 average lost 0.5 per cent to close at 11,433.24, and the broader Topix index fell 0.2 per cent to close at 1145.76.

Trading volumes remained high, with more than 1.6bn shares trading hands.

Banking shares suffered the biggest fall among 33 sectors, dropping 1.2 per cent. SMFG lost 1.36 per cent to Y728,000, and MTFG fell 1 per cent to close at Y1,040,000. UFJ was hardest hit by the sell-off, slipping 2.1 per cent to close at Y605,000.

Japanese tech shares followed their US peers down on Friday, responding to the Nasdaq’s five-day decline.

TDK, a maker of electronics and recording devices, lost 2.38 per cent to Y7,370. NEC Electronics slid 1.43 per cent to Y4,810.

Sony was one of the gainers in the tech sector, rising 1.52 per cent to Y4,020 after it was reported on Thursday that it might work with Microsoft to complete with Apple Computer in the digital music sector.

Exporters finished strong as the dollar continued strengthening, approaching the Y105 mark in overnight trading.

A weaker yen coupled with recent reports of increased steel supplies pushed auto stocks up, with Nissan rising 1.6 per cent to finish at 1,135. Mazda closed 0.6 per cent to Y331, and Honda edged up 0.2 per cent to Y5,380.

Investors continued to buy shares of Nippon Yusen, Japan’s biggest ocean freight firm, after it was reported that the government would reduce usage costs at Japanese ports by at least 30 per cent.

Elsewhere, the pharmaceutical sector fell 1.1 per cent after Merrill Lynch downgraded its recommendation on Sugi Pharmacy on Thursday from “Neutral” to “Sell.” Sugi Pharmacy declined 6.7 per cent to close at 3,070.