TOKYO: Japanese stocks edged down in choppy trade on Wednesday morning as geopolitical tensions soured investor sentiment, while regional banking stocks underperformed as Japanese government bond yields fell to five-month lows.
The Nikkei 225 share average dropped 0.2 percent to 18,380.81 in midmorning trade, after briefly flirting in positive territory earlier.
Regional banks Kita-Nippon Bank and Keiyo Bank both dropped 1.5 percent after the 10-year JGB yield hit 0 percent, its lowest level since mid November.
Escalating tensions between the United States and North Korea also kept investors nervous, while eyes were also on Europe where sterling surged after British Prime Minister Theresa May called an early general election for June 8, seeking to strengthen her party's majority ahead of Brexit negotiations.
But traders said that the Japanese market is seen hitting the bottom, and a sell-off seems to have been exhausted for the time being. "A technical indicator shows that the market is oversold, and investors will likely shift attention to companies, which are likely reporting strong earnings," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
The toraku ratio, or up-down ratio, stood at 72.6 percent as of Wednesday, moving away from 68 percent hit on Monday, the lowest since February 2016. A reading below 80 signals market are oversold.