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Tokyo stocks fall further on U.S. plunge, yen rise

JIJI

Stocks dropped further on the Tokyo Stock Exchange Monday, pressured by selling after Wall Street’s setback late last week and the firmer yen, but cut losses in later hours thanks to buybacks.

The 225-issue Nikkei average closed down 70.78 points, or 0.37 percent, at 18,916.02. On Friday, the key market gauge dived 366.76 points.

The Topix index of all first-section issues sagged 5.82 points, or 0.38 percent, to 1,531.28, after falling 27.61 points the previous trading day.

The Tokyo market kicked off the week with hefty losses after the Dow Jones industrial average fell sharply on Friday in the wake of a continued fall in crude oil prices.

Also, the yen’s ascent against the dollar triggered selling of export-oriented names.

The key indexes gradually cut losses in the afternoon as investors bought back several key issues that had been oversold in the morning, on the back of solid performances of other Asian stock markets, such as Shanghai, brokers said.

The resilience of stocks’ prices in the afternoon also reflected “a spreading view that the Bank of Japan’s supplementary steps to the current monetary easing policy, announced last week, was taken in preparation for additional easing measures at some point in the near future, for example, in March or April,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

Still, investors found it difficult to take risks, with trading expected to lack vigor prior to Japan’s national holiday on Wednesday and the Christmas holiday weekend abroad, brokers said.

Buying of small- and mid-cap stocks are likely to continue as investors cannot step up buying of large-cap issues that are sensitive to changes in the external environment amid heightened concerns over further drops in crude oil prices, an official at a midsize brokerage firm said.

Falling issues outnumbered rising ones 1,400 to 438 in the TSE’s first section, while 92 issues were unchanged.

Volume decreased to 2.35 billion shares from Friday’s 2.99 billion shares.

Toshiba plummeted 9.81 percent following media reports late last week that the major Japanese electronics and machinery maker is expected to log a record group net loss of some ¥500 billion in the year to March 2016.

The yen’s strength dampened export-oriented names. Among them were automaker Toyota, as well as technology giants Sony, Panasonic and Hitachi.

On the other hand, domestic demand-oriented stocks attracted purchases, including daily goods maker Kao, mobile carrier KDDI, Hokkaido Electric Power and meat processor Yonekyu.

Also on the plus side were camera maker Canon and trading houses Mitsubishi and Marubeni.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average slumped 110 points to end at 18,840.