Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks fall further on yen’s ascent

JIJI

Stocks lost further ground on the Tokyo Stock Exchange Wednesday, hurt by the yen’s strengthening against the dollar, with the benchmark Nikkei average briefly slipping below 21,000 for the first time in about four months.

The 225-issue Nikkei average lost 90.51 points, or 0.43 percent, to end at 21,154.17, its lowest closing level since Oct. 12. On Tuesday, the key market gauge shed 137.94 points.

The Topix index of all first-section issues closed down 14.06 points, or 0.82 percent, at 1,702.72, also a level unseen since Oct. 12. It fell 15.19 points on Tuesday.

Stocks opened firmer after U.S. stocks continued to advance on Tuesday. After fluctuating around Tuesday’s closing levels later, however, the key indexes sank into negative territory, as buying was held in check prior to the release set for later on Wednesday of U.S. consumer price data for January, brokers said.

The market accelerated its downswing in the afternoon against the backdrop of the yen’s rise versus the dollar, briefly pushing down the Nikkei average below 21,000 for the first time since Oct. 13 last year on an intraday basis.

In Tokyo trading, the dollar temporarily slipped below ¥107 for the first time in about 15 months.

Although buying on dips helped lift the Nikkei into positive territory at one point, the closely watched index headed south again toward the close, battered by selling apparently by hedge funds, according to market sources.

“The eyes of investors across the world are glued to” the U.S. consumer price index, Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., stressed, indicating that market players took a wait-and-see stance prior to the data announcement.

Investors were concerned that the CPI data, expected to be brisk, could lead to a faster pace of interest rate hikes by the U.S. Federal Reserve, battering Tokyo stocks in tandem with U.S. equities, an official of an asset management firm said.

Yoshihiko Tabei, chief analyst at Naito Securities Co., said selling outpaced buying that reflected hopes for exchange-traded fund purchases by the Bank of Japan.

The market’s downside was underpinned by purchases of stocks backed by strong earnings, Ota said.

Falling issues far outnumbered rising ones 1,581 to 432 in the TSE’s first section, while 52 issues were unchanged.

Volume fell to 1.84 billion shares from Tuesday’s 1.96 billion shares.

The stronger yen battered such export-oriented names as automakers Toyota, Nissan and Honda as well as technology firms Hitachi and Kyocera.

Nonferrous metal producer Mitsubishi Materials plunged 8.81 percent after announcing Tuesday a downward revision in its operating and net profit estimates for the year through March.

Other major losers included mobile phone carrier Softbank Group and motorcycle maker Yamaha Motor.

By contrast, precision equipment maker V-Technology jumped 9.43 percent thanks to an upward revision announced on Tuesday in its operating profit forecast for the year ending in March.

Also on the plus side were Tokai Carbon and semiconductor-related Tokyo Electron.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 10 points to 21,180.