- Sharp intraday moves linked to Friday's options settlement
- TSE first section volume highest in three years
Japanese shares ended down on Thursday after dramatic intraday swings took the Nikkei and Topix indexes to multi-decade highs only to plunge in the afternoon on futures-driven trading ahead of the following day’s options settlement.
In the morning session, the Topix notched a 26-year high and the Nikkei share average broke the 23,000 level for the first time since January 1992, as financial and securities shares rallied.
But when the dust settled, the Nikkei ended down 0.2 percent at 22,868.71, after tumbling from a morning high of 23,382.15 to an afternoon session low of 22,522.83, its biggest one-day move since the election of U.S. President Donald Trump one year ago.
The Topix ended down 0.3 percent at 1,813.11, after soaring as high as 1,844.05 in the morning and skidding as low as 1,791.12 in the afternoon.
Turnover on the Tokyo Stock Exchange’s first section came to 4.9935 trillio n yen, its highest since Nov. 4, 2014.
TSE first section volume came to 2.748 billion shares, its highest since Dec. 12.
The closely watched options settlement price, known in Japan as the special quotation, or “SQ,” is calculated from the opening prices of the 225 shares in the Nikkei average on the second Friday of every month.
“There was no special news that triggered this afternoon’s volatile moves,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “It was massive position adjustment ahead of tomorrow’s SQ.”
Other traders said algorithm-driven trading exacerbated the moves once they began.
Financial and securities shares were among strong performers in the morning, though they pared their gains in afternoon trade.
The securities subindex, which finished the morning up 2.8 percent, ended the day 0.8 percent higher, while the financials subindex, which had gained 2.4 percent in the morning, was up 0.2 percent by the close.
Losing sectors included oil and coal, down 1.6 percent.
Pasona Group shares soared 10.3 percent, after Oasis Management Company, a Hong Kong-based fund, released its reform proposal for the Japanese personnel company’s business strategy and governance structure, which it sent to Pasona’s Board of Directors and management.
The fund said that if Pasona did not respond to constructive dialog to fulfill its responsibility to shareholders, a managed buy-out would be one option.
Nissan Motor Co’s losses accelerated, with its shares falling 2 percent after the automaker on Wednesday forecast an operating profit of 645 billion yen ($5.66 billion) for the year to March, almost 6 percent lower from its prior 685 billion yen view and down 13 percent from a year ago.
Japan Display Inc tumbled 10.4 percent a day after the liquid crystal display maker reported a loss for the quarter through September.
The JPX-Nikkei Index 400 ended down 0.2 percent at 16,119.73 after gaining 1.6 percent in the morning.