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Published on : Aug 04, 2015

The soft manufacturing data from the U.S. and China faced an edge down in Japan’s Nikkei share on Tuesday. This act has prompted investors to pave a path out of cyclical shares to defensive shares such as drugmakers. 

In July, the manufacturing conditions in China region deteriorated to its worst in two years. The data on Monday exhibited data regarding the fresh slides in the global commodity prices. Many suppliers engaged in doing business with Apple Inc have witnessed an edge down because of the decline in the giant’s shares.

The TDK Corp shares fell 4.7 percent and Taiyo Yuden declined 3.6 percent. All the figures have hit six-month lows with the trend expected to continue downward in the near future.   

Owing to the slowing down of Chinese economy, the impact will be majorly seen on the production of durable goods. The investors are vying for different options to understand there is no specific evidence of that reason in the data yet, added president of Commons Asset Management. 

Several companies with heavy exposure in business with China as well as oil and other commodities stocks faced the high pressure too. The demarcation of the shares fell 0.5 percent from the last stood value 20,534.80, down 0.1 percent. The Topix was nearly flat at 1,658.80.

Other earth-moving companies declined too. Hitachi Construction Machinery fell 2.8 percent while Komatsu Ltd declined 2.5 percent. The defensive shares were in favor despite the relatively high valuations. Chiyoda, plant builder shares declined 3.2 percent. 

Overall the drug sector increased 1.9 percent, Shionogi & Co increased 3.3 percent and Takeda Pharmaceutical increased 2.2 percent.  

The drug sector was the leading segment among the TSE (Tokyo Stock Exchange) 33 industry sub-indexes. Airlines increased 3.4 percent to a record high while ANA increased 2.5 percent to a six-year high. Airlines benefitting from the fall in oil prices were the best with Japan Airlines. 

The firms have been helped by an increasing number of foreign tourists visiting Japan. Toyota Motor Corp and Mitsubishi Corp are planning to announce April-June results later in the day. One of the main focuses will be the U.S. employment report due on Friday. The report is expected to sway market views on the U.S. Federal Reserve that will raise the interest rates in September.