Japan Stocks Pull Back After Previous Rally, Weak GDP Data

MarketWatch Pulse

Japanese stocks started the week on a weak note, with the Nikkei Average down 0.8% in early Monday trade and the Topix down 0.6%. While the dollar remained firm against the yen (buying �120.65, not far from its post-crisis high), a downward revision to Japanese economic growth helped grease the skids for a slide in the main indexes, all the more so after Friday's 1.2% advance for the Nikkei Average likely encouraged some investors to book profits. Data released just ahead of the open showed Japan's gross domestic product rose an annualized 1.5% rather than the initial read of 2.2%, though Capital Economics said the revision was due entirely to a drag from inventories, and private consumption was actually revised upward. Still, many of the blue chips fell back, with Hitachi Ltd. and Softbank Corp. down 1.1% each, TDK Corp. down 1.7%, and Toshiba Corp. down 1.9%. Automakers took less of a hit, as Toyota Motor Corp. lost 0.6%, Nissan Motor Co. fell 1%, and Fuji Heavy Industries Ltd. gave up 0.5%. Mitsubishi UFJ Financial Group Inc. was the weakest of the megabanks, its shares down 1.1% as a Nikkei report quoted unidentified sources at the bank as saying the lender would spend close to $2.5 billion over the next three years to grow its asset-management and administration businesses. On the upside, Japan Display Inc. rose 2.9% amid news that key client Apple Inc. will pick up most of the bill for a new $1.4 billion smartphone-panel factory in Japan, according to the Nikkei.

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