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Nikkei slumps 219 points on stronger yen

JIJI

Stocks fell on the Tokyo Stock Exchange on Wednesday, hit by futures-led selling as the yen firmed up against the dollar.

The Nikkei average slumped 218.07 points, or 1.36 percent, to end at 15,836.36. On Tuesday, it gained 31.85 points.

The Topix index lost 14.61 points, or 1.13 percent, to close at 1,282.40, after rising 4.78 points the previous day.

After opening slightly lower on profit-taking, the Nikkei regained ground following Wall Street’s rise overnight. But it slipped into negative territory on selling triggered by the yen’s rise, brokers said.

Investor sentiment was also hurt by news that oil-producing companies failed to agree on oil production cuts at a meeting Tuesday.

In midafternoon trading, the Nikkei average extended its losses to over 400 points at one point, dragged down by index futures-led selling by foreign investors as well as sales on a rally and profit-taking following the yen’s further rise, brokers said.

“Selling on a rally weighed on the market after the Nikkei topped 16,000. Investors could not find fresh incentives to step up buying,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.

Foreign investors moved to sell large-cap export-oriented names after the Nikkei rebounded some 1,100 points in the two sessions through Tuesday, brokers said.

Individual investors hunted small- and mid-cap issues, but their moves had less impact on the overall market, according to the brokers.

“The Nikkei has certainly hit the first bottom,” Suzuki said. “Now (investors) are trying to figure out whether the fall from the beginning of this year has come to an end.”

Falling issues outnumbered rising ones 1,087 to 729 in the TSE’s first section, while 120 issues were unchanged.

Volume decreased to 2,840 million shares from Tuesday’s 3,158 million shares.

Automaker Toyota, electronics maker Sony and camera maker Canon were battered by selling due to the stronger yen.

Oil companies Inpex and Japan Petroleum Exploration posted hefty losses, as investors dumped them in disappointment at the results of the oil-producing countries’ meeting.

Heavyweight components of the Nikkei average also met with substantial selling. Among them were clothing retailer Fast Retailing and robot maker Fanuc.

On the other hand, mobile carrier SoftBank Group drew continued buybacks. Peers KDDI and NTT were also upbeat.

Other winners included trading houses Itochu and Sojitz, as well as shipping firms Kawasaki Kisen and Mitsui O.S.K. Lines.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average tumbled 300 points to close at 15,740.