TOKYO, Aug 27: Japan’s Nikkei share average ended Tuesday morning flat, as cautious investors sat on the sidelines after the United States hinted of possible military action against the Syrian government over an alleged chemical weapons attack.
The benchmark Nikkei was almost flat at 13,639.60 by the midday break, and the broader Topix was also little changed at 1,140.40.
U.S. Stocks had traded higher for most of Monday’s session, as sharply weaker orders for durable goods eased investors’ worries of a cutback in the Federal Reserve’s economic stimulus, but ended lower after U.S. Secretary of State called Syria’s use of chemical weapons ‘undeniable.’
The possibility of U.S. Military action against Syria also appeared to hurt regional markets, with Australian shares off 0.1 percent, while Shanghai and Hong Kong stocks were down 0.2 percent and 0.3 percent, respectively.
‘Worries on Syria are certainly weighing on the global markets. Investors fear Syria could become the next Iraq,’ said Kenichi Hirano, a strategist at Tachibana Securities.
‘But taking the recent gains into account, Asian reactions were not that bad. That’s why the Nikkei pared the losses in the last hour of the morning session.’
Exporters were mixed, with Toyota Motor Corp off 0.6 percent, Nissan Motor Co Ltd down 0.7 percent, while Sony Corp rose 3.5 percent.
‘Trading remains subdued as most players are reluctant to trade actively, ahead of potentially market-moving events in early September,’ said Masayuki Doshida, senior market analyst at Rakuten Securities.
In September investors would get confirmation from the Fed on whether it would indeed start tapering its stimulus in the month, a possibility that has roiled global markets over the past three months.
Emerging markets in Asia, particularly in India and Indonesia, have had a torrid time in recent weeks on concerns about a turn in Fed policy.
Tokyo Electric Power Co Inc was a notable performer on Tuesday morning, soaring 10.4 percent on expectations that the utility would receive further government funding to deal with radioactive water at its crippled Fukushima nuclear power plant.
The stock, which has tumbled 27 percent over the past six sessions, was the most traded stock by turnover on the main board in early trade. It is still up 150 percent so far this year, and has outpaced the Nikkei.
The Nikkei is up 31 percent this year and the yen is down 13 percent against the dollar, spurred by the government’s fiscal expansionary policy and the Bank of Japan’s aggressive monetary stimulus.
(AGENCIES)
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