Nikkei ends flat despite strong chip makers
* Eisai tumbles to daily limit-low
* Eisai's news reminds market of SanBio's crash - analysts
* Financials tumble as U.S. yields fall
By Ayai Tomisawa
TOKYO, March 22 (Reuters) - Japan's Nikkei ended little
changed on Friday as chip-related stocks offset weakness in
financial stocks and drugmakers, which tumbled after Eisai said
it will end its Alzheimer drug trials.
The Nikkei share average closed up a scant 0.1
percent at 1,627.34 points, after flitting in and out of
positive and negative territory. The index rose 0.8 percent for
The broader Topix rose 0.2 percent to 1,617.11.
Chip equipment makers jumped, tracking a rise in U.S. tech
shares overnight. Advantest Corp soared 6.2 percent and
Tokyo Electron surged 5.2 percent.
But financial stocks sold off after the spread between the
three-month Treasury bill yield and the 10-year note yield
shrank to its narrowest level since August 2007 on Thursday in
the wake of the U.S. Federal Reserve's decision to cease
tightening monetary policy.
A narrower spread between the three-month and
10-year yields indicates increased market
expectations of a recession.
"The U.S. tech sector's recovery is indicating that growth
stocks are making a come back," said Norihiro Fujito, a chief
investment strategist at Mitsubishi UFJ Morgan Stanley
"On the other hand, financial stocks are under pressure
reflecting the Fed's dovish stance."
Insurers and banks, which seek higher yielding products such
as U.S. bonds, tumbled. T&D Holdings dropped 1.1
percent, Dai-ichi Life Holdings shed 1.2 percent and
Mitsubishi UFJ Financial Group dropped 0.5 percent.
The drug sector was also in the spotlight, diving
3 percent and was the worst performer on the board.
Eisai Co nose-dived 17 percent to a daily-limit low
of 7,565 yen after the drugmaker and its partner Biogen Inc
said they are ending two trials of their experimental
Alzheimer's disease drug aducanumab.
The news dragged down other pharmaceutical names such as
Astellas Pharmaceutical, which plunged 3.5 percent and
Takeda Pharmaceutical, which fell 0.7 percent.
"It's a blow to hopes for new treatment as this Alzheimer's
drug was one of the drugs which had been expected to succeed,"
said Yoshihiro Okumura, a general manager at Chibagin Asset
He said that Eisai's news reminded the market of SanBio Co's
crash in January, when investors were disappointed with
news that it and Dainippon Sumitomo Pharma Co saw their
joint drug's clinical trial in the United States did not
"There is a common point with SanBio's case whose shares had
been rising on expectations but crashed," said Okumura, adding
that its Alzheimer's drug's failure was a warning to investors
that they should not be overly optimistic about drugmakers'
research and development.
(Editing by Kim Coghill)
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