TOKYO, April 27 (Reuters) – Japanese shares inched lower on Tuesday as a slew of corporate earnings failed to meet investors’ high expectations for strong profit recovery and as the country struggles with containing the COVID-19 pandemic.
The Nikkei share average fell 0.46% to 28,991.89, while the broader Topix shed 0.76% to 1,903.55. The market did not react to the Bank of Japan’s widely-expected decision of keeping policy unchanged.
Earnings have proved to be a drag on the market after the Nikkei had rallied to a three-decade high earlier this year on hopes of economic normalisation in the financial year that began in April.
Dai-ichi Sankyo fell 3.5% after the drugmaker gave a lower-than-expected forecast for the current year to March, while Hulic lost 4.4% after the property developer missed expectations.
Even companies with relatively strong earnings and positive surprises were not spared from sell-off, with camera and medical equipment maker Canon failing to keep earlier gains.
Canon ended down 1.3%, despite its annual operating profit forecast topping market consensus.
Online brokerage Monex lost 1.5% even as it reported a surge in profit due to the rise in bitcoin.
Those losses came after industry bellwether Yaskawa Electric and Nidec fell, despite relatively sound earnings earlier this month.
“Shares in companies which reported positive earnings are not rising. That means investors’ expectations for corporate outlook are too high,” said Takatoshi Itoshima, strategist at Pictet Asset Management.
Japan’s unstable health conditions are also dampening the mood after the government was forced to declare its third state of emergency last week, only one month after it ended the previous one while vaccine rollouts progressed at a snail’s pace.
Bucking the trend, NEC Networks & Systems gained 4.8% on upbeat earnings.
Renewable energy firm Tess Holdings jumped 18.7% in its debut and closed 21.3% above the IPO price, becoming the third most actively traded stock on the entire exchange. (Reporting by Hideyuki Sano and Junko Fujita; Editing by Vinay Dwivedi)