TOKYO, Oct 4 (Reuters) - Japanese shares reversed early
gains on Monday as caution ahead of the formation of a new
government and lingering worries over the China Evergrande debt
crisis outweighed positive sentiment stemming from a strong Wall
Street finish last week.
The Nikkei share average lost 1.14% to 28,441.89 by
0206 GMT, with technology and shipping stocks leading the
decline. Earlier in the session, it rose as much as 1.16% after
five straight sessions of losses. The broader Topix fell
0.72% to 1,972.09.
"The market started falling as soon as it hit its highest
level for the session. This is a typical move when selling
pressure is strong," said Tomoichiro Kubota, a senior market
analyst at Matsui Securities.
"The market is facing a triple pain now, with signs of
Chinese economic slowdown and the U.S. budget issues. Also, we
cannot expect similar monetary policies from Japan's new cabinet
as we had under the Abenomics."
The Evergrande debt crisis continued to cast doubt
over China's economic growth, while the fate of the Biden
Administration's flagship spending bills is not clear yet.
Japan's incoming prime minister Fumio Kishida is set to
formally take office on Monday and so far, he has failed to
impress investors, market participants said.
Chip-making equipment maker Tokyo Electron dragged
down the Nikkei the most, with a 3.21% drop. Technology start-up
investor SoftBank Group fell 2.52% and robot maker
Fanuc lost 3.91%.
Shippers tumbled 8.24%, with Kawasaki Kisen
Department store operators rose after Japan lifted its
COVID-19 emergency measures last week, with Isetan Mitsukoshi
Holdings climbing 4.55%, J.Front Retailing
gaining 4.39% and Takashimaya up 3.86%.
Airlines jumped 2.49%.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu)