TOKYO (Reuters) - The Nikkei share average snapped a three-day gaining streak to close flat on Friday, posting its worst quarter in over a year, as pension fund buying faded and as weakness in other Asian stock markets weighed.
But shares of consumer lenders surged in heavy trading after a source said Sumitomo Mitsui Financial Group (8316.T) Japan’s No.3 bank, planned to acquire all the stock of consumer lender Promise Co. 8574.T that it did not already own. The companies confirmed the news after the close.
Continued strength in the yen against the euro hurt exporters after a German vote had earlier boosted hopes about an eventual resolution to Europe’s sovereign debt woes.
“The euro has slipped below 104 yen, which is weighing on shares of exporters with European exposure,” said Toshiyuki Kanayama, market analyst at Monex Inc.
Window-dressing by fund managers buying some of the quarter’s outperforming issues ahead of the end of the first-half has helped support shares this week but Friday saw little support from such buying amid ongoing uncertainty over European debt woes and their impact on the global economy.
“The fact is that is there is very little non-government fund buying that is going on right now,” said a Hong Kong-based trader at an Asian brokerage.
“The pension funds were buying this week but they’re loathe to continue doing that right up to the last day when the books actually close,” said the trader.
Also hit by weakness in other Asian stock markets, with Chinese shares racking up losses on fears of a property market correction, the Nikkei .N225 closed at 8700.29. It stumbled for the third time this month at its 25-day moving average, which currently lies at 8,729.56.
For the week, it closed up 1.6 percent but was down 2.8 percent and 11.4 percent for the month and the quarter respectively. It was its worst quarter since June 2010.
The broader Topix index .TOPX closed 0.2 percent at 761.17, bringing its losses for the quarter to 10.4 percent.
KDDI (9433.T), Japan’s second-largest mobile carrier, closed down 3.4 percent and was the biggest drag on the benchmark with losses in the stock accelerating into the close after it said it would recall 2 million mobile phones as batteries had overheated.
Shares of the three major wire and cable producers bore the brunt of the selling after Furukawa Electric (5803.T) said it reached a plea agreement with the U.S. Department of Justice to pay a fine of $200 million for the company’s role in an international price cartel for automotive price harnesses.
Furukawa shares slid 6.2 percent in over twice their average 30-day traded volume. Rivals Sumitomo Electric (5802.T) and Fujikura (5803.T) fell 8 percent and 6.2 percent respectively also in heavy volumes.
Promise ended up by its daily limit of 100 yen, a climb of 18 percent at 659 yen. After the bell, SMFG said it would pay 780 yen per share as well as buy new shares to be issued by Promise in a deal worth $2.7 billion.
Hopes of consolidation in the sector drove up shares of rival consumer lenders. Aiful Corp (8515.T) surged 7.6 percent to 113 yen with over 18.5 times the average 30-day traded volume of shares changing hands. Acom (8572.T) rose 2 percent to 1,500 yen.
Isuzu Motors Ltd (7202.T) rose 2.8 percent to 336 yen after the truck maker said it would strengthen its Thai operations including by building a new pickup truck factory for 18 billion yen ($234 million) to boost its annual output capacity by 50 percent to 400,000 vehicles.
Volume was moderate, with 2 billion shares traded on the Tokyo Stock Exchange’s main board. On Thursday, volume spiked in the last half-hour of trading, bringing total daily volume to 2.2 billion shares.
About 13 shares declined for every 10 that rose on the mainboard on Friday.