Stocks fell for the third consecutive session on the Tokyo Stock Exchange on Thursday, due chiefly to selling of large-cap export-oriented names, reflecting the yen’s appreciation.
The Nikkei average lost 38.07 points, or 0.22 percent, to end at 16,936.38. On Wednesday, it fell 142.62 points.
The Topix index sagged 1.53 points, or 0.11 percent, to 1,358.97, after dropping 11.58 points the previous day.
The Tokyo market opened higher on the heels of Wall Street’s rise, after the U.S. Federal Reserve, at a two-day Federal Open Market Committee (FOMC) meeting that ended Wednesday, reduced the expected pace of interest rate hikes this year from four times to twice.
Investors stepped up purchases in midmorning trading, with the Nikkei briefly surging some 278 points.
The key indexes, however, slumped into negative territory and accelerated their downswing in the afternoon, weighed down by selling of export-oriented automakers and technologies, due to the yen’s strengthening against the dollar, brokers said.
In Tokyo trading, the dollar slipped below ¥112 for the first time since Feb. 25 in the middle of afternoon trading.
“Investors took heart from the FOMC decision to slow down the pace of interest rate hikes to twice this year as the figure matched the market’s consensus forecast,” said Masashi Oguchi of Mito Securities Co.’s Investment Information Department.
But the yen’s ascent against the dollar reignited investor concerns over earnings deterioration at export-oriented companies in Japan, brokers said.
“The dollar’s movements against the yen will be a key to the course of the market,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc. “If the dollar weakens further and drops below ¥111, stocks would be at risk.”
Falling issues outnumbered rising ones 915 to 872 in the TSE’s first section, while 157 issues were unchanged.
Volume increased to 2,207 million shares from Wednesday’s 1,861 million shares.
Toshiba nose-dived 7.97 percent in the wake of a news report that the U.S. Justice Department and the Securities and Exchange Surveillance Commission are investigating suspicious accounting practices at a U.S. nuclear power unit.
The stronger yen battered automakers Toyota and Nissan, as well as camera maker Canon and machinery maker Hitachi.
On the other hand, oil companies Inpex and Cosmo Energy Holdings were buoyant, along with trading houses Mitsui and Itochu, after crude oil futures in New York rebounded sharply on Wednesday.
Megabank groups Mitsubishi UFJ and Sumitomo Mitsui attracted buybacks.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average climbed 10 points to end at 16,820.