Tokyo stocks open flat

Tokyo stocks opened flat on Tuesday, with a positive lead from Wall Street countered by negative sentiment from a stronger yen.

Tokyo stocks open flat
Pedestrians stand in front a quotation board displaying a foreign exchange rate of US dollar against the Japanese yen (R) beside the share price index of the Tokyo Stock Exchange (L) in Tokyo on July 27, 2020. Tokyo's benchmark Nikkei index closed marginally lower on July 27, playing catch-up after a four-day weekend, with global risk aversion on intensifying US-China tensions. AFP
The key Nikkei 225 index edged up 0.04 percent or 9.53 points to 22,725.38 in early trade while the broader Topix slipped 0.08 percent or 1.27 points to 1,575.42.

"Japanese stocks are likely to test a rebound after a rally in US shares but a stronger yen will weigh on and limit the upside," said Okasan Online Securities chief strategist Yoshihiro Ito. 

Wall Street stocks finished solidly higher on Monday, while the dollar drifted lower.

The greenback has fallen against other major currencies amid expectations that the Federal Reserve will keep interest rates lower for longer and that the economy could underperform those in other regions due to the coronavirus.

The main highlights of the week will likely be the US Fed forward guidance on Wednesday, along with a raft of earnings releases, including Amazon, Apple and other tech heavyweights, said Steven Innes, global market strategist at AxiCorp.

"How much appetite traders have to add on risk is probably limited. 

"But this is not a typical market with so much health and economic headline risk so best to keep on your toes," he said in a commentary.

The dollar was trading at 105.26 yen in early Tokyo trade against 105.38 yen in New York Monday afternoon.

The yen's rise clouds Japanese exporters' outlooks as it makes their products less competitive abroad and erodes profits when they are repatriated.

Nissan Motor tumbled 3.88 percent to 412.7 yen hours ahead of its announcement of April-June earnings.

Toyota dropped 1.23 percent to 6,654 yen while Fujifilm Holdings rose 2.84 percent to 4,913 yen on news that the US government is providing funds to a US subsidiary for a new coronavirus vaccine.   

Major airlines continued falling amid reports that they suffered record operating losses for the last quarter. ANA Holdings was down 1.49 percent at 2,337.5 yen while Japan Airlines fell 1.13 percent to 1,873 yen.

Topics: Tokyo , stocks , Okasan Online Securities , Yoshihiro Ito , Federal Reserve
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