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Nikkei tumbles 250 points on firmer yen, weak Chinese data

JIJI

Share prices fell sharply Monday after the yen strengthened against other major currencies.

The Nikkei 225 average ended 250.20 points lower at 15,152.91, while the Topix dropped 15.93 points to close at 1,222.95, falling for the fourth straight session.

The Nikkei lost steam due in part to futures-led selling, brokers said. The index extended losses in the afternoon as the dollar slipped below ¥103 on weaker than expected preliminary readings of the HSBC China manufacturing purchasing managers’ index for December, they said.

Market players had no major incentives to sell, but the stronger yen probably fueled a risk-off sentiment among investors keenly awaiting the outcome of the Federal Open Market Committee meeting that will wrap up Wednesday, one market source said.

Also, investors likely grew wary of the future course of the Japanese economy after the Bank of Japan’s “tankan” quarterly survey for December showed that capital spending projected by large manufacturers for the business year through March fell from the September survey, said Yoshihiko Tabei, chief analyst at Kazaka Securities Co.

The closely watched business sentiment survey, published shortly before the market’s opening, also showed that the outlook diffusion index toward March for large manufacturers was weaker than the DI for current business conditions, which improved for the fourth consecutive quarter.

Falling issues far exceeded rising ones 1,527 to 180 on the first section, while 66 issues were unchanged.

Volume was sharply lower at 2.245 billion shares, down from 3.598 billion Friday.

Stocks fell across the board, with all 33 first-section sector subindexes ending in negative territory.

The stronger yen drove down automakers, with Toyota shedding 1.94 percent and Mazda giving up 3.05 percent.

Shipping firms Nippon Yusen and Mitsui O.S.K. Lines were also hit by the yen’s rise.

Mobile carrier SoftBank lost more than 3 percent, while fellow major Nikkei component Fast Retailing, the operator of Uniqlo clothing stores, fell about 1.8 percent.

Major electronics maker Hitachi was downbeat, along with Sony.

By contrast, telecommunications carrier NTT jumped 3.18 percent.

Tokyo Electric Power was buoyant on a media report that the government will significantly expand the size of its interest-free loan program for the troubled utility.

JGBs move little

Japanese government bonds moved in a narrow range Monday.

In late interdealer trading in cash JGBs, the yield on the latest 332nd 10-year issue with a 0.6 percent coupon was at 0.685 percent, down from 0.695 percent late Friday.

The lead March futures contract on 10-year JGBs finished up 0.01 point from Friday at 143.86. Volume plunged to 30,937 contracts from 44,909.

Market players are unwilling to make any major bets ahead of the U.S. Federal Reserve’s policy meeting set for Tuesday and Wednesday, an official at a bank-affiliated securities house said.