Stocks shed early gains to close lower on the Tokyo Stock Exchange on Thursday, weighed down by the yen’s ascent against the dollar.
The Nikkei average lost 97.01 points, or 0.51 percent, to end at 18,789.69. On Tuesday, the key market gauge dropped 29.32 points. The Tokyo market was closed Wednesday for a national holiday.
The Topix finished down 9.98 points, or 0.65 percent, at 1,523.62, after climbing 2.32 points the previous trading day.
Tokyo stocks got off to a firmer start after the Dow rose for the third consecutive day in New York on Wednesday thanks to higher crude oil futures.
The Nikkei briefly gained over 180 points to retake 19,000 in the early morning, but its topside soon grew heavy and the indicator sank into negative territory in the afternoon on the yen’s strength, brokers said.
After fluctuating around the previous trading day’s closing level for a while, the Nikkei extended its losses toward the close, losing over 100 points temporarily.
A bank-affiliated securities firm official said that trading was slow as many overseas investors were off at Christmas. The U.S. market will close early on Thursday and be shut on Friday.
“In addition to the yen’s weakening, I believe that worries that grew about this fiscal year’s corporate earnings due to a recent plunge in the estimated earnings per share (of the Nikkei component companies) weighed on the market,” said Mitsuo Shimizu, equity strategist at Japan Asia Securities Co.
The plunge apparently reflected expected losses at electronics maker Toshiba and beverage producer Kirin Holdings, Shimizu said, adding, “Some investors could take a wait-and-see mood ahead of the release of earnings results for October-December.”
But overall investor sentiment is gradually improving as crude oil prices have showed some resilience, brokers said. Other positive factors include news about a planned hike in the cap on deposits at Japan Post Bank.
“If the dollar’s weakening pauses, or any other positive factor comes out, the market is seen rising toward the end of this year,” as it often does in year-end periods, Shimizu said.
Falling issues far outnumbered rising ones by 1,523 to 326 in the TSE’s first section, while 86 issues were unchanged.
Volume totaled 1,987 million shares, against Tuesday’s 1,974 million shares.
The higher yen battered exporters, such as automakers Toyota and Fuji Heavy, electronics parts producer Murata Manufacturing and tire maker Bridgestone.
Airlines ANA and JAL were also downbeat on the back of the higher crude oil prices.
Other major losers included banking groups Sumitomo Mitsui and Mitsubishi UFJ, clothing store chain operator Fast Retailing, game maker Nintendo and drug producer Ono Pharmaceutical.
By contrast, steel-maker JFE Holdings, oil companies Inpex and JX Holdings, and construction machinery firm Komatsu attracted buying.
Japan Post Bank was also buoyant after a report on Tuesday that a government panel plans to propose allowing the bank to increase the cap on deposits to 13 million yen from the current 10 million yen.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average fell 60 points to end at 18,810.