Tokyo stocks ended nominally lower on Friday after thin trade with overseas investors absent over the Christmas holidays. Financial markets in Australia, Hong Kong, India, Indonesia, Malaysia, New Zealand, the Philippines, Singapore and South Korea are closed for a public holiday.
The benchmark Nikkei 225 index fell 0.04%, or 11.74 points, at 26,656.61, for a weekly loss of 0.40%.
The broader Topix index edged up 0.23%, or 4.14 points, to 1,778.41 for a weekly loss of 0.83%.
“The market was in the state of ‘no selling in quiet times’,” Okasan Online Securities said, referring to a Tokyo market maxim cautioning traders to reject the impulse to dump shares during quiet moments and remain patient until the next opportunity arises.
“The range was so narrow that no one felt shares move,” the brokerage said in a note.
Overnight gains on Wall Street lifted the Tokyo market to open higher.
The momentum however was short-lived, and investors searched for fresh news in sluggish trade.
Still, bargain hunting prevented a sharp fall of the market.
“The news that Britain and the EU reached a trade deal meant one fewer element of uncertainty, but investors did not see it as a major trading cue,” SMBC Nikko Securities added.
Former prime minister Shinzo Abe faced tough questioning in televised parliament sessions about a scandal involving payments to his supporters, but that did not move the market either.
The dollar stood at 103.56 yen, against 103.70 on Thursday in New York.
Shortly before the market opened, the government said Japan’s jobless rate was 2.9% in November, improving from 3.1% in the previous month.
Among major shares, SoftBank Group lost 3.15% to 7,692 yen following reports that Chinese e-commerce giant Alibaba, for which the Japan-based internet titan serves as a major shareholder, was facing an anti-trust probe by Chinese authorities.
Shipping firms fared better.
Nippon Yusen surged 6.50% to 2,392 yen, after the firm upgraded annual earnings outlook.
Mitsui OSK lines also roared 6.35% to 3,150 yen. Automakers also enjoyed gains.
Toyota rose 0.59% at 7,789 yen. Nissan trimmed early gains but still ended up 0.71% at 555.2 yen.
But Sony lost 1.36% to 9,953 yen. Nintendo travelled between positive and negative territory, and ended down 0.09% at 64,670 yen.
Meanwhile China stocks rose on Friday to post weekly gains, as the Brexit deal helped lift sentiment and as investors cheered Beijing’s continued policy support. The blue-chip CSI300 index rose 0.8%, to 5,042.01, while the Shanghai Composite Index closed 1% higher at 3,396.56.
The tech-heavy start-up board ChiNext firmed 0.7%, while the STAR50 index inched up 0.1%.
Leading the gains on Friday, the CSI300 materials index and CSI300 healthcare index jumped 3.2% and 2.5%, respectively.
Britain clinched a narrow Brexit trade deal with the European Union on Thursday, just seven days before it exits one of the world’s biggest trading blocs in its most significant global shift since the loss of empire.
Also helping soothe worries over the country’s corporate bond defaults, China’s central bank said it will step up its regulation of the bond market in line with the law, vowing “zero tolerance” towards illegal activities.
For the week, SSEC added 0.1%, while CSI300 index firmed 0.8%, hovering near a five-year high, as Beijing pledged further support for its economy.
In the annual Central Economic Work Conference, a gathering of top leaders and policymakers to chart the economy’s course in 2021, China said it would maintain support for its economic recovery, avoiding a sudden shift in policy, to help keep growth within a reasonable range in 2021.
Looking into 2021, the Shanghai index could hit the 4,000-point level thanks to China’s solid economic recovery and continued policy support, Southwest Securities said in a report.
Meanwhile the pound hovered below a 2-1/2-year high on Friday after Britain and the European Union struck a narrow Brexit Trade deal, while overall sentiment in currency markets was tempered by a stalled US coronavirus economic relief package.
The sterling last stood at $1.3549, having failed to rise above its 2-1/2-year high of $1.3625 hit last week Britain clinched a Brexit Trade deal with the EU, just seven days before it exits the world’s biggest trading bloc.
Against the euro, the pound fetched 89.80 pence per euro , after scaling a three-week high of 89.54 on Thursday.
The British currency also hit a 3-1/2-month high of 141.06 yen before easing to 140.22 on the Japanese currency, though Trade was slow as many financial markets were shut for Christmas.
While the Brexit deal will preserve Britain’s zero-tariff and zero-quota access to the bloc’s single market and avoid a damaging “no-deal” exit, it does not cover the nation’s much larger and influential finance sector. And, Brussels has made no decision yet on whether to grant Britain access to the bloc’s financial market.
“It is Important to recognise this is just the beginning of a new trading relationship that can be built on,” wrote Gavin Friend, senior market strategist at National Australia bank in London.
“We also have to stand by for both sides to spin the deal in their respective ways designed for domestic consumption. Invariably the national press will respectively talk of ‘wins’ versus the other side.”
While the deal was a relief to every market player, the bare-bones nature of the pact leaves Britain far more detached from the EU, analysts say, suggesting the discount that has dogged UK assets since 2016 will not vanish soon.
“Now the deal is done, over time, we are going to start to see economic impact of leaving the EU. And I think that’s clearly negative for the UK Economy,” said Daisuke Uno, chief strategist at Sumitomo Mitsui bank.
“I would think the pound will slip after all things positive about a deal have already been priced in,” he added.
Also hindering the UK Economy in the near-term, the prevalence of Covid-19 cases in England jumped, with one in every 85 people infected in the latest week as a new infectious strain of virus rages in the south east of the country.
The US dollar was hemmed in tight range as a standoff on a $2.3tn coronavirus in Washington continued and raised the prospect of a partial government shutdown.