* Financial shares lead losses after fall in bond yields * Investors take profit after sharp gains over past month * Nintendo, DeNA soar on tie-up plan * Hopes for change in Japan firms underpin market By Hideyuki Sano TOKYO, March 19 (Reuters) – Japanese share prices slipped from 15-year highs on Thursday, as investors took profits on recent gainers such as financial shares, which could suffer from a fall in Japanese bond yields.
The Nikkei share average, fell 0.7 percent to 19,418.38, after briefly hitting a 15-year intraday high of 19,557.17 in early trade.
Yields on Japanese government bonds fell after the U.S. Federal Reserve struck a more dovish tone on interest rates and gave a more cautious view of the world’s largest economy.
Investors locked in on gains, with the market having risen more than eight percent in the past month on a variety of reasons including expectations of more buying by Japanese public investors to hopes for earnings growth and corporate governance reforms.
“The rally has been very rapid and it will be hard to bid it up further. Japanese investors will probably take profits ahead of the end financial year (on March 31,)” said Hiroshi Ono, the head of equity investment at Sumitomo Life Insurance.
Financial shares led the decline after Japanese bond yields fell. Low interest rates tend to squeeze bank revenues.
Bank shares fell 1.9 percent, with Mitsubishi UFJ Financial Group slipping 2.2 percent and Sumitomo Mitsui Financial Group dropping 1.7 percent.
Insurers also fell 1.9 percent, with Dai-ichi Life falling 2.3 percent and T&D Holdings 2.7 percent.
The yen’s one percent gain against the dollar following the Fed’s policy meeting was also cited as a possible trigger for profit-taking, though shares of exporters were not particularly weak.
Toyota Motor rose 0.2 percent, outperforming the overall market, while Nissan Motor was down 1.2 percent.
Bucking the trend, shares in Nintendo and DeNA extended their big gains for a second day after the companies announced a tie-up.
Nintendo rose 11 percent after hitting limit-up on Wednesday, while DeNA was untraded with a glut of buy orders at the day’s limit for two days in a row.
Some market players said hopes that Japanese companies would step up efforts to boost profits and shareholder returns were sustaining strong foreign investor appetite for Japanese stocks.
Fanuc gained 1.1 percent, hitting another record high, extending gains since a surprise change in policy to limit its engagement with shareholders reported last Friday to more than 17 percent.
“It was an extremely well-held view that Fanuc would never change. That myth was busted. It was an extremely well-held view that Nintendo would never change. And that myth also was busted,” said Stefan Worrall, director of cash equities at Credit Suisse.
“So for foreign investors, their traditionally held views, with regards to Nintendo and Fanuc, have been turned upside-down,” he said.
The broader Topix fell 0.5 percent and the JPX-Nikkei Index 400 dropped 0.6 percent.
(Additional reporting by Tomo Uetake; Editing by Jacqueline Wong)
- Investment & Company Information