Nikkei drops ahead of Fed, ECB; large-caps underperform

By Ayai Tomisawa

TOKYO (Reuters) - Japan's Nikkei share average snapped a four-day winning streak on Friday as investors stayed on the sidelines ahead of major economic events, while large-cap stocks such as SoftBank and Fanuc weighed on the index.

The Nikkei <.N225> ended 0.6 percent lower at 22,694.50, just above the settlement price of June Nikkei futures and options <0#JNI*.OS> contracts at 22,825.20, announced after market close.

The Nikkei is still up 2.4 percent for the week, its biggest gain in 11 weeks.

"There are major events to focus on now. The market is waiting for the Fed and ECB meetings to price in the results," said Takuya Takahashi, a strategist at Daiwa Securities."There are still risks that the outcomes may not be something the market is expecting, but considering how much momentum the Nikkei has regained this week, it seems the market is fairly optimistic."

On Thursday, the Nikkei hit levels not seen in more than two weeks.

The U.S. Federal Reserve is widely expected to announce an interest rate hike on Wednesday while the European Central Bank will debate next week whether to end bond purchases later this year.

Investors were cautious as U.S. President Donald Trump stuck to his tough stance against top allies ahead of the summit on Friday and Saturday in Charlevoix, Quebec, after imposing tariffs on steel and aluminum imports from Canada, Mexico and the European Union.

Large-cap stocks languished, with SoftBank <9984.T> falling 2.9 percent, Fanuc Corp <6954.T> shedding 1.3 percent and Tokyo Electron <8035.T> tumbling 2.1 percent.

Defensive stocks such as railways and utilities outperformed. West Japan Railway Co <9021.T> rose 0.1 percent and Tokyo Gas <9531.T> advanced 0.9 percent.

Kikkoman Corp <2801.T> surged 1.9 percent after a media report that honorary CEO Yuzaburo Mogi said it plans to establish sales companies to sell soy sauce in South America and India.

The broader Topix <.TOPX> fell 0.4 percent to 1,781.44.

(Reporting by Ayai Tomisawa; Editing by Vyas Mohan)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Netflix third-quarter earnings forecast falls shy of Wall Street expectations
• Scientists find new monkey species in Congo's rainforest
• Nicaragua breaks diplomatic ties with Italy over 1978 murder case