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Nikkei slides 128 points on yen

JIJI

Stocks lost further ground on the Tokyo Stock Exchange on Tuesday, hit by selling of export-oriented issues as the yen rose against the dollar.

The Nikkei average lost 128.17 points, or 0.76 percent, to end at 16,783.15. On Monday, the it fell 103.46 points.

The Topix sank 14.18 points, or 1.04 percent, to 1,347.72, after falling 13.45 points the previous day.

The Tokyo market opened lower, pressured by continued selling to cash in gains from last week’s advance.

The Nikkei briefly tumbled about 340 points in the morning, weighed down by selling of export-oriented issues after the yen’s ascent against the dollar, brokers said. Investor sentiment was also hurt by downward revisions to private consumption and public investment in revised GDP data for October-December, released just before the opening bell, even though the figures were revised upward.

In the afternoon, stock prices cut losses, thanks to buying of exchange-traded funds presumably by the Bank of Japan and purchases by pension funds on the back of a halt to the yen’s strengthening.

China’s exports and imports both posted double-digit year-on-year falls in February, according to trade statistics released Tuesday. But the data’s impact on the Tokyo stock market was limited as “the dismal readings had already been factored in” and Shanghai stocks showed some resilience following the release of the data, said Mitsuo Shimizu, equity strategist at Japan Asia Securities Co.

“Investors are taking a wait-and-see stance prior to monetary policy meetings in Europe, Japan and the United States” this week and next week, Shimizu said. The European Central Bank is expected to take additional easing steps at its board meeting on Thursday.

Meanwhile, the market’s volatility is seen remaining high for the rest of this week ahead of Friday’s fixing of special quotations to settle March index futures and options contracts, brokers said.

Falling issues far outnumbered rising ones 1,470 to 380 in the TSE’s first section, while 93 issues were unchanged.

Volume increased to 2,546 million shares from Monday’s 2,216 million shares.

Automaker Suzuki fell bank 3.76 percent on dilution concerns after the company said Monday it will issue 200 billion yen in convertible bonds. Rivals Toyota, Nissan and Mazda were also downbeat due to the stronger yen.

Financial issues met with continued profit-taking, brokers said. Losers included banking groups Mitsubishi UFJ and Sumitomo Mitsui, as well as brokerage firms Nomura and Daiwa.

By contrast, heavyweight components of the Nikkei average drew buybacks. Among them were mobile carrier Softbank and industrial robot maker Fanuc.

Also on the plus side were Japan Tobacco, railway operator JR Tokai, daily goods manufacturer Kao and game maker Nintendo.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average slumped 150 points to end at 16,800.