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Japan shares fall on profit-taking after election, firmer yen

09/14/2020 | 11:21pm

TOKYO, Sept 15 (Reuters) - Japanese shares dipped on Tuesday as a stronger yen pressured exporters and investors booked profits after a three-day rally in the run up to the ruling party election, where Abe ally Yoshihide Suga was picked as the new leader.

The benchmark Nikkei share average fell 0.56% to 23,427.30 by the midday break, having hit a fresh seven-month high in the previous session.

The profit-taking came after Japan's Chief Cabinet Secretary Yoshihide Suga, a long-time loyal aide of Prime Minister Shinzo Abe, was chosen head of Japan's ruling party on Monday, all but confirming he would replace Abe as prime minister on Wednesday.

The broader Topix lost 0.68% to 1,639.80, with highly cyclical iron and steel, airlines and land transport being the three worst-performing sectors on the main bourse.

Export-oriented firms slipped as the yen remained strong against the dollar, staying close to a two-week high of 105.55 yen scaled the previous day.

Canon Inc slipped 2.87%, while Panasonic Corp fell 1.1%.

Data on Tuesday showed China's industrial output rose 5.6% and retail sales gained 0.5% in August from a year ago, as the world's second-largest economy tried to regain its footing from the fallout of the coronavirus outbreak.

The U.S. Federal Reserve's two-day meeting was also in focus, as investors awaited clues on its monetary policy outlook.

Oriental Land dropped 1.12% after local media reports said the Japanese operator of the Tokyo Disney Resort would slash winter bonuses by 70%.

SoftBank Group fell 0.64%, having marked its biggest daily gain since late March in the previous session.

Sony Corp skidded 1.67% after media reported the company would reduce its PS5 production due to chip procurement problems for the financial year. (Reporting by Eimi Yamamitsu; Editing by Devika Syamnath)

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