Tokyo stocks fall on yen's rise

19:00, February 25, 2010      

Email | Print | Subscribe | Comments | Forum 

Japan's Nikkei Average fell 0.95 percent on Thursday as the yen's appreciation hurt exporters like Pioneer Corp. and the U.S. Federal Reserve chief's commitment to keeping interest rates low for a sustained period of time only lifted the market briefly.

The benchmark Nikkei Average relinquished 96.87 points to close down for a third successive session at 10,101.96. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 4.28 points, or 0.48 percent, to 891.41.

Congressional testimony by U.S. Federal Reserve Chairman Ben Bernanke resulted in the Fed committing to maintaining very low interest rates for "an extended period," citing a weak job market and mild inflation.

Although Wall Street rose overnight on the news, market players still remain concerned about the economic health of the U.S. as home sales, the crux of the global financial meltdown, slumped 11 percent to a record low on Wednesday.

"There is no real confidence in economic fundamentals yet," said Naoteru Teraoka, a strategist at Chuo Mitsui Asset Management Co.

Additionally U.S. consumer confidence hit a 10-month low in February as the short-term outlook on jobs worsened, prompting a flight from riskier assets, which pushed the yen up against the dollar on Wednesday, which was further exacerbated on Thursday by the euro plummeting to a one-year low against the yen at the mid- 120-yen level, amid renewed concerns about Greece's debt problems, and the U.S. dollar retreated to the upper 89-yen level.

Subsequently Japanese exporters, who lose profits on a strong yen when they're repatriated, took a battering on Thursday with Pioneer Corp. plunging 5.3 percent to 322 yen and Kyocera Corp. falling 1.48 percent to 7,990 yen. Hitachi Ltd. lost 1.33 percent to 296 yen.

High-tech issues also suffered with chip test maker Advantest Corp. falling 2.08 percent to 2,120 yen and semiconductor manufacturer Tokyo Electron diving 3.18 percent to 5,480 yen. NGK Insulators Ltd. also ended negative, retreating 3 percent to close at 1,960 yen.

Automakers also dropped as the yen's appreciation dampened profit outlooks with Suzuki Motor Corp. skidding down 2.3 percent to 1,869 yen and Nissan Motor Co. Ltd. falling 1.67 percent to 708 yen. Truck maker Hino Motors Ltd. ended trade at 329 yen per share, a loss of 1.5 percent.

Toyota president Akio Toyoda's apology for his firm's safety issues that led to series of recalls over unintended acceleration and braking problems that now includes more than 8.5 million vehicles globally, at a U.S. congressional hearing on Wednesday, had little impact on trade according to brokers.

However, Toyoda's pledge to win back consumer confidence was overshadowed by three Toyota suppliers being raided by the Federal Bureau of Investigation (FBI) in an antitrust probe.

The FBI's Detroit division served warrants at Denso, Yazaki North America and Tokai Rika on Tuesday evening, a special agent said in a statement.

Denso, which supplies accelerator pedals and other parts to Toyota, confirmed that the raid on its U.S. offices was part of an investigation into alleged antitrust violations and that it was not related to Toyota's recalls.

Denso Corp. fell 3 percent to 2,418 yen and fellow parts supplier Tokai Rika Co. Ltd lost 5.6 percent to 1,591 yen.

Toyota Motor Corp. meanwhile shed 0.15 percent to 3,270 yen.

Trade was moderate on the Tokyo exchange's First section, with some 1.8 billion shares changing hands, slightly up on Wednesday's volume of 1.7 billion shares.

Declining issues outnumbered advancing ones by 816 to 729.

Source: Xinhua
  • Do you have anything to say?


Special Coverage
Major headlines
Editor's Pick
  • Argentines camp to protest
  • Argentina seeks UN help to settle dispute over Malvinas islands
  • French air staffs strike gets thousands stranded
  • On a Pedestal: From Renaissance Chopines to Baroque Heels
  • Dignified and graceful: Jesus Lorenzo's collection at Madrid Fashion Week
  • Zhou Xun graces L'OFFICIEL China March issue
Most Popular
Hot Forum Dicussion