The Nikkei share average slipped in early trade on Friday as weak US economic data raised concerns over the health of the world’s largest economy and its impact on the export-reliant Japanese economy.
Japanese market players were more concern over the soft US data than Thursday’s positive US corporate earnings, which helped propel the S&P 500.SPX index to a 2-1/2-month high.
“Toshiba was up 5 percent on the back of US earnings but what else came out in the US that has any real bearing on Japanese stocks?” a senior deal at a foreign brokerage said.
“The bigger problem that you have got at the moment is the weak US data that’s coming out.”
The Nikkei.N225 eased 0.3 percent to 8,772.13, holding above its five-day moving average at 8,754.61.
However, Toshiba Corp (6502.T) climbed 3.2 percent after surging more than 5 percent earlier, boosted by forecast-beating earnings from US SanDisk Corp (SNDK.O) as margins on its flash memory chips exceeded expectations despite falling prices.
US data on Thursday showed factory activity in the mid-Atlantic region contracted in July for a third straight month, new claims for jobless aid surged last week and home resales slumped to their lowest level in eight months in June.
Japan’s earnings season gets into gear next week.
Takashi Hiroki, chief strategist at Monex Inc, said Japanese companies were likely to post positive earnings.
He cited Yaskawa Electric Corp (6506.T) as an example. The electric motor maker rose 8.4 percent on Thursday after it lifted its first half operating profit forecast by 50 percent to 4.5 billion yen. Yaskawa shares were down 0.7 percent on Friday.
The broader Topix.TOPX was down 0.7 percent at 742.10 after breaking a nine-day losing streak on Thursday. The index is still up 1.8 percent so far this year.
With the recent weakness, the Topix’s 12-month forward price-to-earnings ratio slipped to 11.2 from a two-month high of 11.5 hit last week, according to Thomson Reuters Datastream.-By Dominic Lau