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Tokyo stocks drop on vaccine concerns

Tokyo stocks

The Nikkei Stock Average finished down 130.62 points, or 0.44 percent, at 29,620.99, while the Topix index ended 6.37 points, or 0.33 percent, lower at 1,952.18

Tokyo stocks finished lower on Wednesday as investor sentimnt was dented by a stronger yen and a call from U.S. health authorities for use of Johnson & Johnson’s (J&J’s) Covid vaccine to be paused after a number of blood clot cases. The 225-issue Nikkei Stock Average finished down 130.62 points, or 0.44 percent, from Tuesday at 29,620.99. The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 6.37 points, or 0.33 percent, lower at 1,952.18.

Decliners were led by marine transportation, textile and apparel, and nonferrous metal issues.

The U.S. dollar edged down to the upper 108 yen range, its lowest level since late March, as investors favoured the perceived safety of the yen amid an unclear outlook for the coronavirus vaccine rollout in the United States, dealers said.

The announced pause in the use of Johnson & Johnson’s vaccine due to cases of a “rare and severe type of blood clot” in individuals who had recently received the shot also weighed on Tokyo shares from the outset, brokers said.

The drug is under clinical testing in Japan, where most of the population has yet to receive a shot about two months after the start of the government’s inoculation campaign.

There was a sense of caution that the pause could cause delay economic normalization, said Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Research Institute.

But the Nikkei’s losses were limited as many investors refrained from making bold moves ahead of the corporate earnings season getting into full swing in Japan and the United States, Sengoku said.

Bucking the downward trend, Toshiba Corp. drew robust buying.

Toshiba climbed 265 yen, or 5.8 percent, to 4,860 yen after reports that American private equity firm Kohlberg Kravis Roberts & Co. and Canadian investment giant Brookfield Asset Management Inc. are exploring a buyout offer for the Japanese company.

Toshiba has already received a buyout proposal from British private equity firm CVC Capital Partners.

Market players expect a bidding war will bring a higher premium, said Chihiro Ota, assistant general manager of investment research at SMBC Nikko Securities Inc.

On the First Section, declining issues outnumbered advancers 1,376 to 739, while 76 ended unchanged.

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