Stocks lost further ground on the Tokyo Stock Exchange on Wednesday, with investor sentiment dampened by the yen’s rapid ascent and North Korea’s claim it had detonated a hydrogen bomb.
The Nikkei average fell 182.68 points, or 0.99 percent, to close at 18,191.32. On Tuesday, it lost 76.98 points.
The Topix ended down 15.87 points, or 1.05 percent, at 1,488.84, after dropping 4.96 points the previous day.
Buying took the upper hand at the outset of Wednesday’s trading after the Dow Jones industrial average rebounded slightly on Tuesday.
After the initial buying ran its course, the indexes repeated minor fluctuations around the previous day’s closing levels and then retreated sharply in the middle of the morning session as the yen strengthened at a rapid pace.
The yen’s sharp rise came after China set the yuan’s reference rate at the lowest level in four and a half years against the dollar, brokers said.
Stocks accelerated their downswing in the late morning, following news reports about a purported nuclear test by North Korea, briefly pushing down the Nikkei over 300 points in the early afternoon.
Stocks moved weakly for the rest of the day, but the market showed some resilience toward the close as losses were limited in other Asian markets including South Korea, brokers said.
An official of a bank-affiliated securities firm said North Korea’s H-bomb claim was negative on the market, but it would likely have a limited impact on the nation’s economy.
“It is difficult in the first place for investors to activate purchases this week ahead of the release of U.S. jobs data (for December) on Friday,” said Kenichi Hirano, market analyst at K Asset Co.
The market took an additional blow from the yen’s strengthening against the dollar, Hirano added.
“The yen’s advance raised worries about downside risks in earnings estimates by Japanese companies,” Hirano said.
An official of a Japanese asset management firm warned that if the yen rises further, the Nikkei average is likely to fall below 18,000.
Falling issues far outnumbered rising ones 1,493 to 359 in the TSE’s first section, while 83 issues were unchanged.
Volume increased to 2,076 million shares from Tuesday’s 1,923 million shares.
The higher yen battered export-oriented names, including automakers Toyota, Fuji Heavy, Mazda and Honda, industrial robot maker Fanuc and air conditioner manufacturer Daikin.
Alps, Murata Manufacturing, Nitto Denko and TDK, all iPhone parts suppliers, were downbeat after a news report that Apple Inc. plans to cut the production of the latest iPhone models.
Also on the minus side were oil companies JX Holdings and Inpex, banking groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, clothing store chain operator Fast Retailing and game maker Nintendo.
By contrast, department store operator Isetan Mitsukoshi attracted buying after reporting brisk sales for December.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average lost 180 points to finish at 18,180.