Stocks retreated for the fourth straight session on the Tokyo Stock Exchange Friday, with the benchmark Nikkei average closing below 17,000 for the first time in almost two weeks, pressured by the yen’s rise.
The 225-issue Nikkei slumped 225.40 points, or 1.32 percent, to end at 16,819.59, its first finish below the 17,000 line since Jan. 26. On Thursday, the key market gauge fell 146.26 points.
The Topix index of all first-section issues closed down 19.84 points, or 1.43 percent, at 1,368.97, after losing 17.46 points the previous day.
The Tokyo market got off to a weaker start, dragged down by losses in export-oriented issues, such as automakers, due to the yen’s strengthening against the dollar. Concerns over deteriorated earnings at such companies were fueled by the dollar’s fall below 117 yen, brokers said.
In the afternoon, stocks accelerated their downswing in line with the yen’s further rise, briefly pushing the Nikkei average down more than 400 points.
The yen’s ascent came as speculation receded over an interest rate hike by the U.S. Federal Reserve in March, following recent disappointing economic indicators, including weekly initial claims for unemployment insurance benefits released Thursday, according to brokers.
The market was also weighed down by losses in the banking sector, on the back of growing worries about earnings at financial institutes after the Bank of Japan’s decision last week to introduce a negative interest rate policy, brokers said.
An official of a bank-affiliated securities firm said that the market also came under pressure as investors found it difficult to purchase stocks ahead of the release later on Friday of U.S. jobs data for January.
“Although U.S. equities and crude oil prices have become firmer, recent weak economic data led to the dollar’s drop,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
Due to concerns over the health of the U.S. economy, the yen is unlikely to weaken sharply against the dollar, an official of a major securities firm said.
If the yen continues rising, Japanese corporate earnings are likely to deteriorate for January to March and Tokyo stock prices could drop further, an official of another bank-affiliated securities firm said.
“Tokyo stocks are not expected to stage a sharp rebound for the time being,” Otani said.
Falling issues overwhelmed rising ones 1,515 to 359 in the TSE’s first section, while 62 issues were unchanged.
Volume increased to 3.39 billion shares from Thursday’s 3.13 billion shares.
Among exporters, automakers Toyota, Fuji Heavy, Honda and Nissan, met with heavy selling, along with technology giant Hitachi, industrial robot maker Fanuc and electronics producer Sony.
Megabanks Mitsubishi UFJ, Mizuho and Sumitomo Mitsui suffered sharp drops.
Auto parts maker Takata fell to a listing-to-date low, hit by a wave of selling amid lingering concerns over its defective air bag problem.
Another electronics maker, Toshiba, retreated 11.18 percent, a day after releasing a wider net loss estimate for the current fiscal year through March.
By contrast, camera maker Nikon gained ground after posting better-than-expected earnings for April to December.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average closed down 350 points at 16,720.