Japanese shares headed for their first decline in four days on thin volumes ahead of the U.K. vote on whether to stay in the European Union.
The Topix slid 1.1 percent to 1,279.62 at the trading break in Tokyo, paring a three-day rally. All but one of the 33 industry groups dropped on volumes 20 percent below the 30-day intraday average. The Nikkei 225 Stock Average lost 1 percent to 16,002.60.
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.
Stocks in Tokyo followed U.S. equities higher, rising for the first time in four days as investors weighed a report showing Japan’s economy shrank in the fourth quarter and signs shares are oversold after posting the worst weekly slump since 2008.
The Topix index added 2 percent to 1,219.90 as of 9:01 a.m. in Tokyo after plunging 13 percent last week. The Nikkei 225 Stock Average gained 2 percent to 15,245.67 as the yen weakened against the dollar for a second day. U.S. markets rebounded on Friday to halt the longest losing streak since September. Chinese mainland markets reopen Monday after a week long holiday during which global stocks fell into a bear market.
A report Monday showed Japan’s economy shrank 1.4 percent in the fourth quarter on an annualized basis, more than economists’ forecast for a 0.8 percent contraction.
The Topix’s 14-day relative strength index fell to 26.49 on Friday, below the level of 30 which some traders say indicates that shares will rise.