TOKYO, Sept 27 (Reuters) - Japanese shares settled slightly
lower on Monday, giving up early gains driven by cyclical stocks
as investors booked profits after a sharp rally this month,
while caution also prevailed ahead of a change in political
The Nikkei share average closed down 0.03% at
30,240.06 after rising as much as 0.5%. The broader Topix
slipped 0.14% to 2,087.74.
The Nikkei has risen almost 8% this month on hopes of an
economic recovery amid declining cases of COVID-19 infections.
"Early gains were erased as investors tried to lock in
profits after a big rally until last week," said Masahiro
Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset
"The sell-off was driven by caution ahead of a change in
political leadership, while there are still fears of possible
default by China Evergrande."
Japan's ruling Liberal Democratic Party is set to hold an
election to choose a new leader, who is set to become the
country's next prime minister.
Stocks with an exposure to China continued to be hit as
fears of a potential default at China Evergrande
loomed. Air-conditioner maker Daikin Industries fell
3.44% and toilet maker Toto slipped 1.84%.
Shippers led the decline among the Tokyo Stock
Exchanges 33 industry sub-indexes with a drop of 6.45%.
Shares of companies that benefited from the stay-at-home
lifestyle were subdued, after the health minister said the
COVID-19 infection situation was improving such that emergency
conditions could soon be lifted in most parts of the country.
Gamemaker Bandai Namco lost 2.81% and frozen food
maker Ajinomoto fell 2.27%.
Shares that would benefit from an economic reopening
advanced, with airlines jumping 3.76% and railway
operators rising 1.69%.
Department stores rose, with Takashimaya up 4.04%,
Isetan Mitsukoshi gaining 3.66% and Marui Group
(Reporting by Junko Fujita; Editing by Rashmi Aich and