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Japan's travel shares drop after govt suspends subsidy programme

TOKYO, Dec 15 (Reuters) - Travel-related shares in Japan slid on Tuesday after the country’s Prime Minister Yoshihide Suga said the travel subsidy programme would be suspended nationwide around the New Year to contain a surge in cases of the novel coronavirus.

At a coronavirus meeting held on Monday, Suga said he would temporarily halt the programme from Dec. 28 to Jan. 11.

The measure comes at a time when Japan has witnessed a spike in COVID-19 infections. The country reported a record of more than 3,000 new daily cases on Saturday and its capital Tokyo confirmed 621 new cases.

“There is a feeling among the people that (Suga’s) suspension measure was rather too late. That is because this nationwide suspension would, in the long run, help Japan to contain the coronavirus infections,” said Takashi Hiroki, chief strategist at Monex Securities.

“So, suspending the travel programme is not necessarily a negative catalyst for the overall market. But, it is inevitable for travel-related shares to be sold,” he said.

The benchmark Nikkei share average fell 0.27% to 26,659.91 by 0153 GMT, while the broader TOPIX lost 0.44% to 1,782.61.

Airline sector led the declines on the main bourse. ANA Holdings was the largest percentage loser on the index, sliding more than 6.7% after investors flipped some of its newly issued stocks. Meanwhile, shares of Japan Airlines lost 2.8%.

Railway companies also took a blow, with West Japan Railway and Central Japan Railway falling 1.07% and 0.21%, respectively.

Elsewhere, travel booking service H.I.S. lost nearly 2.5%, with its earnings providing an additional headwind as it reported on Friday a net loss of 25.04 billion yen for the year ended Oct. 31. (Reporting by Eimi Yamamitsu; editing by Uttaresh.V)

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