Stocks fell Thursday, pressured by profit-taking after falls in overseas equities and the yen’s strengthening on the back of rekindled economic and political concerns in the Eurozone.
The Nikkei 225 average closed down 157.83 points, or 1.26 percent, at 12,335.96. On Wednesday, the key market gauge gained 22.17 points. The Topix fell 9.69 points, or 0.93 percent, to end at 1,036.78 after gaining 2.05 points the previous day.
The TSE opened slightly lower on the heels of overnight declines in European and U.S. equities due to uncertainties over Italy’s political situation and Cyprus’ financial problems.
With export-oriented issues weighed down by the yen’s rise against the euro and the dollar, the Nikkei gradually extended losses and briefly dropped more than 200 points.
“Selling gained the upper hand near the end of Japan’s fiscal year partly because there has been a sense of overheating in the short run,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
The TSE was pressured by selling of index futures and weakness of Asian markets, notably the Chinese market, brokers said.
“Investors are expected to step up buying on hopes for Japanese economic policies next week, with the release of the Bank of Japan’s ‘tankan’ quarterly business sentiment survey and the central bank’s two-day policy-setting meeting scheduled,” Miura said.
In addition, fresh investment money is likely to flow into the market once the new fiscal year starts next week, he said.
Declining issues outnumbered advancing ones 1,099 to 538 in the first section, while 72 issues were unchanged. Volume rose to 2.983 billion shares from Wednesday’s 2.483 billion.
Mitsubishi Motors tumbled 3.92 percent a day after the automaker reported defects in lithium-ion battery packs used in two vehicles. GS Yuasa, the parent of the supplier of the batteries, nose-dived 11.11 percent.
Key yield hits new low
A key 10-year Japanese government bond yield rewrote a new low since June 2003 for the six straight trading day Thursday, but futures on 10-year JGBs failed to gain further ground ahead of the fiscal yearend on Sunday.
The yield on the latest 328th 10-year JGB issue with a 0.6 percent coupon stood at 0.510 percent in late interdealer trading, down from Wednesday’s 0.515 percent.