Japan's Topix hits record high despite US tariffs on pharma

By Kevin Buckland

TOKYO, Sept 26 (Reuters) - Japan's broad Topix index rose to an all-time high on Friday, despite pressure from pharmaceutical shares following new tariffs on the sector from the White House overnight.

The tech-heavy Nikkei index, however, retreated from a record-high close seen on Thursday, as chip-sector shares echoed a downbeat overnight performance among the U.S. peers.

The Topix .TOPX was up 0.4% at 3,198.43, as of 0102 GMT, just below the record 3,199.24 from earlier in the session.

The Nikkei .N225 slipped 0.3% to 45,604.82, after closing at 45,754.93 in the prior session.

Real estate .IRLTY.T was the best performer among the Tokyo Stock Exchange's 33 industry groups, gaining 2.3%.

Pharma .PHAM.T was near the bottom with a nearly 1% decline.

Market reaction varied widely within the sector to U.S. President Donald Trump's announcement of 100% tariffs on imports of branded or patented pharmaceutical products from October 1.

Sumitomo Pharma 4506.T tumbled 4.3%, Otsuka Holdings 4578.T dropped 3.5%, and Daiichi Sankyo 4568.T lost 1.6%, although Takeda 4502.T added 0.2% and Shionogi 4507.T gained 1.3%.

A sharp drop among chip-related shares weighed more heavily in the Nikkei, with Lasertec 6920.T and Disco 6146.T each dropping around 5% to lead declines among stocks in the index.

Sumitomo Mitsui DS Asset Management strategist Masayuki Kichikawa remains bullish on the outlook for Japanese equities, citing relatively healthy economic fundamentals in Japan, and relatively reasonable valuations compared to Wall Street and many other markets.

"Obviously, when the U.S. tech sector experiences a correction, Japanese equities are not immune, but they should show some resilience," Kichikawa said.

"Japanese shares are not cheap, but they are more resonably priced compared with the U.S."