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Japanese shares fall amid low support for new prime minister

10/05/2021 | 11:16pm EST

TOKYO, Oct 6 (Reuters) - Japan's Nikkei average reversed course on Wednesday to hit its lowest levels in over two months amid concerns over the impact of China's debt crisis, while modest approval ratings for Japan's Prime Minister Fumio Kishida disappointed investors.

The Nikkei share average fell 0.97% to 27,551.00 by 0221 GMT, touching its lowest since Aug. 20 after rising as much as 1.4% earlier in the session. The broader Topix lost 0.25% to 1,942.93.

"Japanese shares rebounded earlier in the session but the gains were not as strong as investors had expected, which drove them to start selling shares," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute.

Heavyweights led the declines, with Uniqlo clothing shop operator Fast Retailing losing 2.36%, technology investor SoftBank Group falling 1.23% and robot maker Fanuc slipping 2.22%.

Local media poll showed Kishida is struggling to find his footing with voters just two days after he was voted into office and launched his new government. One daily showed his approval rating was at 45%, much lower than his predecessor Yoshihide Suga's administration when it came into power last year.

"That means Kishida's party will be unlikely to enjoy a land slide victory at the coming general election," said Kentaro Hayashi, senior strategist at Daiwa Securities.

Kishida's plans to raise capital gain tax could drive sell-offs as they want to lock in profits before the tax hike, Hayashi said.

Kishida, in his first news conference as prime minister, said this week tweaking the country's financial income tax rate will be among options in addressing income disparity.

Sumitomo Osaka Cement rose the most on the Nikkei, with a 13.21% rise, followed by Taiheiyo Cement, which gained 7.2% and Pacific Metals Co Ltd, up 5.39%.

Mitsubishi Motors lost the most on the index, falling 7.55%, followed by Takeda Pharmaceutical, losing 6.25% and Kawasaki Kisen Kaisha, down 4.48%. (Reporting by Junko Fujita; Editing by Krishna Chandra Eluri)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
FANUC CORPORATION -1.00% 22805 End-of-day quote.-10.07%
FAST RETAILING CO., LTD. -1.58% 70500 End-of-day quote.-23.76%
KAWASAKI KISEN KAISHA, LTD. 2.81% 4945 End-of-day quote.134.14%
MITSUBISHI MOTORS CORPORATION -6.13% 383 End-of-day quote.76.50%
PACIFIC METALS CO., LTD. -1.84% 2085 End-of-day quote.-6.50%
SOFTBANK GROUP CORP. -2.02% 6208 End-of-day quote.-22.96%
SUMITOMO OSAKA CEMENT CO., LTD. -4.14% 3475 End-of-day quote.15.26%
TAIHEIYO CEMENT CORPORATION -2.10% 2240 End-of-day quote.-13.14%
TAKEDA PHARMACEUTICAL COMPANY LIMITED -1.95% 3075 End-of-day quote.-18.11%
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