Japan Shares Fall First Time in Four Days on Brexit Vote Jitters

  • Trading volumes drop in Tokyo as investors await the U.K. vote
  • Fed Chair Janet Yellen signals cautious view of the economy

Japanese shares fell for the first time in four days on thin volumes ahead of the U.K. vote on whether to stay in the European Union.

The Topix slid 0.7 percent to 1,284.61 at the close in Tokyo, after paring an earlier decline of as much as 1.2 percent. Trading volumes were 17 percent below the 30-day average. The day’s drop follows a three-day rally that drove the index 4.2 percent higher, its biggest such gain in almost two months. The Nikkei 225 Stock Average lost 0.6 percent to 16,065.72.

Investors remain jittery ahead of Thursday’s U.K. referendum amid concern a vote to leave the EU could destabilize the global economy and push investors into haven assets such as the yen. While most polls are still split on the outcome, betting shops put the probability of a Brexit at about 26 percent, near the lowest level this month.

“We still are standing with uncertainty,” said Soichiro Monji, chief strategist at Daiwa SB Investments Ltd. That’s making it difficult for investors to make aggressive bets in either direction, he said, adding that there are some who are taking profits today after the recent gain in shares.

Utilities, steelmakers and shippers led declines among the 33 Topix industry groups, with about four shares slipping for each that gained.

  • Tokyo Gas Co. fell 5.9 percent to lead losses on the Nikkei 225 after the power supplier said it acquired a 25 percent stake in a Texan shale gas asset.

  • Nitto Denko Corp. dropped 4.1 percent, falling for a second day after the chemical producer said it will make a “large-scale” investment in a manufacturing facility in China.

  • SoftBank Group Corp. rose 2.6 percent. China’s Tencent Holdings Ltd. will lead an $8.6 billion acquisition of gamemaker Supercell Oy, including shares held by the Japanese mobile giant. Also Nikesh Arora, the heir apparent at SoftBank, said late Tuesday he will step down from the Japanese company, after founder Masayoshi Son said he planned to keep the reins.

Futures on the S&P 500 added 0.1 percent after the underlying equity gauge climbed 0.3 percent on Tuesday.

Investors are also weighing Federal Reserve Chair Janet Yellen’s testimony to lawmakers in Washington Tuesday. She sketched a cautious and clouded view of the economy while seeking to avoid taking sides or being overly alarmist about the probable global fallout should Britain exit the European Union. Still, she reiterated that such an event could have “significant economic repercussions.”

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