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Firming yen triggers more selling, keeping Nikkei in decline

JIJI

Stocks slumped Monday, hurt by selling amid the yen’s appreciation against other major currencies.

The 225-issue Nikkei average gave up 92.78 points, or 0.59 percent, to end at 15,641.68, extending its losing streak to a third session. On Friday, the key market gauge fell 12.74 points.

The Topix index of all TSE first-section issues closed down 3.53 points, or 0.27 percent, at 1,293.86, after rising 3.00 points the previous trading day.

The Nikkei average kicked off the week with losses due to falls in heavily weighted component issues, such as clothing retailer Fast Retailing and mobile carrier Softbank.

The key market yardstick accelerated its downswing, driven by futures-led selling as the yen strengthened against other major currencies, brokers said.

Lackluster showings by other Asian equities also weighed on Tokyo stock prices, brokers said.

In the afternoon, investors retreated to the sidelines in the absence of fresh trading incentives, with the New York market closed Monday for Martin Luther King Jr. Day.

Investor sentiment was somewhat chilled by concerns over the future of Prime Minister Shinzo Abe’s administration after a candidate backed by the ruling Liberal Democratic Party lost in Sunday’s closely watched mayoral election in Nago, Okinawa, to a staunch opponent of a contentious U.S. base relocation plan, brokers said.

“Market participants refrained from actively buying mainstay export-oriented names that are easily affected by external factors, while buying small- and medium-cap domestic demand-oriented issues,” said Hiroaki Hiwada, senior strategist at the investment information department of Toyo Securities Co.

A wait-and-see mood is expected to grow this week as investors are waiting to see corporate scorecards for October-December 2013. Earnings releases will get into full swing late this month.

Rising issues outnumbered falling ones 994 to 677 in the TSE’s first section, while 106 issues were unchanged. Volume decreased to 2.226 billion shares from Friday’s 2.738 billion.

Nintendo plummeted 6.15 percent after the game maker sharply revised down on Friday its earnings estimates for the year to March, brokers said.

Realtors Mitsui Fudosan, Sumitomo Realty and Mitsubishi Estate came under profit-taking pressure.

The stronger yen dampened export-oriented names, including electronics makers Panasonic and Sony and automaker Mitsubishi Motors.

On the other hand, shipping firms Kawasaki Kisen and Nippon Yusen were buoyant, along with power utilities Kyushu Electric and Hokkaido Electric.

Other major winners included automaker Toyota, megabank group Mizuho and construction machinery maker Komatsu.

JGBs trend upward

Japanese government bonds were higher in quiet trading Monday amid weakness in the Japanese and U.S. stock markets.

The lead March futures contract on 10-year JGBs gained 0.10 point from Friday to end at 144.30. Volume dwindled to 16,113 contracts from 20,843.

In late interdealer trading in cash JGBs, the yield on the latest 332nd 10-year issue with a 0.6 percent coupon stood at 0.660 percent, down from 0.670 percent late Friday.