Japan’s stocks fall as ex-dividend shares, LDP vote nerves weigh

Japanese equities declined on Monday as ex-dividend stocks weighed on the benchmarks and investors became cautious ahead of the ruling Liberal Democratic Party’s leadership vote.

Topix Index fell 1.7% to 3,134.27 as of 10:38 a.m. Tokyo time

Out of 1,673 stocks, 277 rose and 1,363 fell, while 33 were unchanged
Nikkei declined 0.9% to 44,939.18.

Banks and autos weighed most heavily on the broader Topix, which saw its biggest intraday decline since early August.

Shares of many companies, including Toyota Motor Corp. and Mitsubishi UFJ Financial Group Inc., were ex-dividend, meaning investors who buy on or after Monday are not entitled to the next dividend payout.

“As the benchmarks have risen to such high levels, I think many investors are selling to secure profits, now that the benefit of dividends is gone,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

“Mid-to-long term investors will stick around, but those looking for quick gains are probably exiting today,” Miura said.

Caution ahead of the LDP leadership vote on Saturday is also likely to cap any gains this week, Miura added. “It’s still hard for investors to tell which way the vote will go, so many will adopt a wait-and-see approach.”

In individual moves, Sony Financial Group Inc. shares opened 37% above their reference price after Sony Group Corp. spun off and listed the company.

ADVANCERS

Advantest (6857) +3.5%

Lasertec (6920) +2.3%
Sysmex (6869) +1.2%

DECLINERS

Nomura (8604) -4%
Aeon (8267) -3.2%

INSIGHTS

The MSCI AC Asia Pacific Index was up 0.2%
Topix Index is up 13% year-to-date, vs. MSCI AC Asia Pacific Index up 20%
Topix Index members are trading at 16.0 times their estimated earnings for the next 12 months.

Read Also: Asian stocks mixed at open, oil drops on OPEC+