Tokyo: Japan’s Nikkei stock average extended losses to 1.2% on Friday, 8 February, as investors sold machinery stocks such as Fanuc Ltd on weak industry data and a halt in TOPIX futures trade limited the ability to hedge.
Traders said they were also wary of holding stocks over the three-day weekend, especially in view of recent volatility on Wall Street. All Japanese financial markets are closed on Monday for a public holiday, National Foundation Day.
The Tokyo Stock Exchange said during the midday break that it would halt trade in March TOPIX futures for the rest of the session because of a system glitch. Futures contracts are often used by investors to hedge their positions.
“Investors are holding back trade for now because of the system problem,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management, adding that weaker-than-expected machinery orders data were also weighing on the market.
“The machinery data is unlikely to be a big sell-off factor, though recently the market tends to react sharply to any negative news,” he said.
At 0459 GMT, the benchmark Nikkei average was down 1.2% or 151.4 points at 13,055.8, extending losses after finishing the morning session down 0.8%. The broader TOPIX index shed 1.2% to 1,289.84.
Machinery stocks fell after government data showed core private-sector machinery orders, a volatile series seen as an indicator of capital spending in the coming six to nine months, fell a more-than-expected 3.2% in December from the previous month.
Industrial robot maker Fanuc fell 4.5% to 8,870 yen, while construction machinery maker Komatsu Ltd dropped 5.5% to 2,305 yen and machine tool maker Okuma Corp tumbled 10.1% to 824 yen.