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Tokyo stocks tumble on Wall Street downturn, higher yen

JIJI

Stocks dropped sharply on the Tokyo Stock Exchange Monday, bruised by lower U.S. stock prices and a higher yen.

The 225-issue Nikkei average was down 254.92 points, or 1.69 percent, at 14,808.85.

The Topix index of all TSE first-section issues fell 19.05 points, or 1.57 percent, to close at 1,196.84.

The Tokyo market kicked off the week with substantial losses, with sell orders mounting in the wake of a plunge on Wall Street on Friday despite solid U.S. jobs numbers for March announced the same day. The yen’s appreciation against the dollar and other major currencies also contributed to the tumble.

In the afternoon, the market continued remaining under pressure from moves to lock in profits, particularly in the financial and real estate sectors, as well as futures-led selling, brokers said.

The closely watched employment data have confirmed the U.S. labor market’s steady recovery, analysts said.

But after the report’s release, “the market saw all positive news gone” at least for now, Ayako Terada, vice president at Nomura Securities Co.’s Investment Research & Investor Services Department, pointed out.

“With a sense of some market overheating, investors turned cautious about buying further,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc. The Nikkei average gained more than 830 points over last two weeks.

The day’s trading lacked vigor also as some players took to the sidelines to hear comments by Bank of Japan Gov. Haruhiko Kuroda after the end of the two-day BOJ Policy Board meeting on Tuesday, Nishi added.

Many market participants expect little surprise from the meeting itself, brokers said.

Falling issues outnumbered rising ones 1,513 to 216 in the TSE’s first section, while 72 issues were unchanged.

JGBs rise on stock slide

Japanese government bonds climbed in Tokyo Monday as U.S. Treasuries gained ground late last week and Tokyo stocks extended losses.

The lead June futures contract on 10-year JGBs closed up 0.34 point from Friday at 144.89 on the Osaka Exchange. Volume increased to 21,176 contracts from 15,773.

In late interdealer trading in cash JGBs, the yield on the latest 333rd 10-year issue with a 0.6 percent coupon stood at 0.615 percent, down from 0.640 percent late Friday.

JGBs attracted purchases from the outset of Monday’s trading after a rise in U.S. Treasuries on weak stocks affected by profit-taking spurred by weaker-than-expected U.S. government jobs data for March, brokers said.

U.S. Treasuries drew buying interest while selling of U.S. equities ballooned as some investors expected the jobs data to be much stronger than the market’s consensus, an official at a bank-affiliated brokerage firm said.

JGBs accelerated their upswing in the afternoon as Tokyo stocks extended losses amid the yen’s strengthening against other major currencies.

Many players expect the BOJ to keep its monetary policy unchanged at its Policy Board meeting that started Monday.