The Nikkei average lost further ground to end at another two-month low Thursday after seesawing amid uncertainties over the course of U.S. monetary policy.
The Nikkei 225 closed down 110.85 points, or 0.85 percent, at 12,904.02, dropping below 13,000 for the first time since April 5. The Topix shed 19.26 points, or 1.77 percent, to end at 1,070.77.
The Tokyo market opened lower after the Dow Jones industrial average closed below 15,000 for the first time in a month Wednesday in the U.S., while the dollar slipped through the ¥99 line overnight.
After the initial selling ran its course, stocks repeated wild ups and downs throughout the day, with the Nikkei moving in a range of more than 370 points. Stocks moved in tandem with the dollar’s fortunes against the yen for most of the session.
Buying on dips and buybacks hoping for technical rebounds could not maintain momentum partly due to a risk-averse mood on the back of uncertainties over when the U.S. Federal Reserve will start scaling back its asset buying program.
Toshiyuki Kanayama at Monex Inc. noted that “technically the market has clearly been oversold, with the Nikkei having fallen below its 25-day moving average by nearly 10 percent.
“But investors are quickly reselling stocks they bought on dips because the market loses steam soon after a rebound,” Kanayama pointed out.
According to brokers, players will not feel comfortable making buying moves until the Nikkei rises for two sessions in a row.
Declining issues overwhelmed rising ones 1,570 to 122 in the first section, while volume edged up to 4.374 billion shares from Wednesday’s 4.368 billion.
Toyota, Honda and Komatsu were downbeat, while power utilities suffered hefty losses. But Tokyo Electron, Fanuc and N
TT DoCoMo all gained ground.
JGBs on the rise
Japanese government bonds rose further Thursday as Tokyo stocks continued losing ground.
In late interdealer trading in cash JGBs, the yield on the latest 329th 10-year issue with a 0.8 percent coupon stood at 0.835 percent, down from 0.855 percent late Wednesday.
In futures trading, the lead June contract on 10-year JGBs closed up 0.24 point from Wednesday at 143.02. Volume grew to 46,932 contracts from 39,120.