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Tokyo stocks fall back on firmer yen

JIJI

Stocks fell back on the Tokyo Stock Exchange on Wednesday, hurt by the yen’s strengthening against the dollar.

The 225-issue Nikkei average dropped 183.37 points, or 0.76 percent, to close at 23,940.78, down for the first time in four trading days. On Tuesday, the key market gauge climbed 307.82 points.

The Topix index of all first-section issues ended down 9.84 points, or 0.51 percent, at 1,901.23, after gaining 19.15 points the previous trading day. It posted the first drop in four sessions as well.

Both the Nikkei and the Topix stayed in negative territory throughout Wednesday, due mainly to the weakness of exporters, brokers said, while noting that the market lost ground as the dollar fell below ¥110 in the Tokyo foreign exchange market the same day.

Investors moved for selling to lock in profits after the Nikkei closed above 24,000 for the first time in over 26 years on Tuesday, they said.

On Wednesday, the market was also pushed down by selling of high-tech names, triggered by industrial robot maker Yaskawa Electric’s announcement on Tuesday of its nine-month consolidated earnings that fell short of investor expectations, market sources said.

Individual investors were active in selective buying in early trading, but seemed to have retreated to the sidelines after the benchmark indicators fell further in the afternoon, an official of a bank-affiliated securities firm said.

The Tokyo market has been rising recently “on the premise that foreign exchange rates would not move wildly,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.

But the situation may have changed as the yen climbed to the highest level against the dollar since September last year, he said, warning that the situation “requires close attention.”

A scenario assumed by investors that stock prices will keep rising after major companies finish releasing their earnings is unlikely to happen under the current market circumstances, including the yen’s firmness, Suzuki said.

Meanwhile, an official of a major securities firm pointed out that mainstay issues tend to rebound immediately even if they fall after the releases of disappointing earnings, suggesting that the market’s downside may be solid.

Falling issues slightly outnumbered rising ones 989 to 961 on the TSE’s first section, while 113 issues were unchanged.

Volume rose to 1.52 billion shares from 1.42 billion shares on Tuesday.

Sony met with selling after JPMorgan Securities lowered its target stock price and investment rating for the electronics and entertainment giant.

By contrast, realtors Tokyo Tatemono, Nomura Real Estate Holdings and Mitsui Fudosan were buoyant on expectations that higher condominium prices will support their earnings.

Nitori Holdings was hunted after the furniture retailer announced brisk sales for January on Tuesday.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average was down 210 points at 23,910.