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Nikkei falls into negative territory on rise in yen

JIJI

Stocks lost ground again Friday as a stronger yen sapped investor confidence in month-end trading.

The Nikkei 225 average lost 82.04 points to close at 14,841.07. On Thursday, the key market gauge lost 47.86 points.

The Topix ended down 5.69 points at 1,211.66 after falling 8.00 points Thursday.

In the morning, the market moved without a clear direction, with the Nikkei wavering around Thursday’s closing level.

Stocks failed to follow the lead of Wall Street’s overnight gains traced in part to Federal Reserve Chairwoman Janet Yellen’s testimony before the Senate Banking Committee.

In her testimony Thursday, Yellen said that the U.S. central bank could reconsider the pace of scaling down its asset purchases if the economic outlook changes significantly, fueling expectations that the Fed’s easy monetary policy would continue longer than expected.

Later, the TSE lost steam, sending the Nikkei down more than 180 points as the yen gained strength against other major currencies, notably against the dollar, brokers said.

Investors reacted little to a surprisingly robust increase in Japan’s industrial output for January published just before the opening bell, brokers said. The figure rose 4.0 percent month on month against a median growth forecast of 2.9 percent among economic institutions.

The yen’s sudden appreciation against the dollar bore much of the blame for Friday’s fall in Tokyo stocks, said Masashi Oguchi at Mito Securities Co.’s investment information department.

He explained that Yellen’s “dovish” testimony provided relief to investors that U.S. interest rates will likely stay low for some time despite the ongoing “tapering,” which in turn drove up the yen. The Japanese currency briefly soared more than half a yen against the greenback during the day’s session.

Still, the market’s downside was limited by investors waiting to buy on dips partly to secure rights to receive dividends at the end of the current fiscal year to March, an official at a major brokerage said.

JGB futures edge up

Japanese government bond futures edged up in directionless trading Friday.

The lead March contract on 10-year JGBs finished up 0.02 point from Thursday at 145.17. Volume grew to 28,713 contracts from 20,081.