TOKYO • Stocks in Tokyo and Shanghai lost ground yesterday in quiet trading with most of the region's other key markets closed for public holidays.
Both Japan and China declined as investors took profit from a recent global rally fuelled largely by expectations for the incoming administration of United States President- elect Donald Trump.
Incentives were few and the Dow Jones Industrial Average, which on Friday again fell short of 20,000 points in the light trade ahead of the holiday weekend, provided no tailwind.
Tokyo's benchmark Nikkei 225 index, which was closed last Friday for a national holiday, ended 0.16 per cent, or 31.03 points, lower at 19,396.64. The broader Topix index of all first-section issues fell 0.37 per cent, or 5.68 points, to 1,538.14.
"Selective shares are facing profit-taking following the recent gains, as many investors are on the sidelines in a holiday mood, looking to fresh factors to trade," said Okasan Securities broker Shinichi Yamamoto in Tokyo.
GREENBACK ON A ROLL
(Sentiment favouring a strong dollar) will likely continue until Mr Trump actually takes office in January and maybe during the so-called 'honeymoon period', or 100 initial days of his government, unless some geopolitical risks emerge.
MR MARITO UEDA, senior dealer at FX Prime.
Japan's banks remained under selling pressure on negative news in the sector from overseas.
Italy on Friday approved a state- funded rescue of the world's oldest bank, Monte dei Paschi di Siena, while Deutsche Bank and Credit Suisse agreed to pay a total of almost US$12.5 billion (S$18.1 billion) to settle disputes over the sale of mortgage-backed securities during the global financial crisis.
Japan's MUFG dropped 1.22 per cent, while its rival Sumitomo Mitsui Financial Group was down 0.84 per cent.
"There are very few market participants around at the end of the year, and with some short-term overbuying, Japanese stocks may keep adjusting their levels," Tokai Tokyo Research Institute chief global strategist Shoji Hirakawa told Bloomberg.
But Nintendo was up 4.06 per cent to 24,555 yen after its president told a Japanese newspaper it plans to release at least three apps a year for games in smartphones.
Chinese stocks fell yesterday morning, driven by a decline in commodity shares affected by a plunge in futures prices, dealers said.
The benchmark Shanghai Composite Index dipped 0.78 per cent, or 24.33 points, to 3,085.82 by the break.
The Shenzhen Composite Index, which tracks stocks on China's second exchange, lost 0.82 per cent, or 16.12 points, to 1,954.94.
Currency markets were quiet.
"The undercurrent is still a strong dollar but there was an adjustment phase in the past few days after a surge on expectations for Mr Trump," said FX Prime senior dealer Marito Ueda.
Sentiment favouring a strong US dollar "will likely continue until Mr Trump actually takes office in January and maybe during the so-called 'honeymoon period', or 100 initial days of his government, unless some geopolitical risks emerge".
The greenback traded at 117.10 yen, down from 117.31 yen on Friday in New York.
The euro rose slightly, trading at US$1.0464 from US$1.0454 last Friday.