Japan stocks edge down as yen keeps climbing

Friday 10th July, 05:54 PM JST

TOKYO —

Japanese stocks were virtually flat Friday, ending an anemic week that saw the benchmark index fall more than 5 percent.

The Nikkei 225 stock average fell 3.78 points, or 0.04%, to 9,287.28 in thin trading. It was the Nikkei’s eighth straight loss.

The broader Topix index declined 0.2% to 872.50.

Investors have grown increasingly cautious over the past week amid doubts about a speedy economic recovery, a sharp appreciation of the yen and nerves about U.S. corporate earnings reports next week.

Recent foreign exchange volatility spells trouble for the nation’s exporters like Toyota Motor Corp and Sony Corp. A stronger yen means Japanese products are more expensive in foreign markets, and it reduces the value of overseas earnings when repatriated to Japan.

Most companies have based their earnings forecasts this year on the assumption that $1 buys 95 yen. The dollar fell under the 93-yen level Friday in Asia.

Sony fell 0.9% to 2,230 yen, Nintendo Co lost 1% to 25,942 yen, and Hitachi Ltd shed 3.9% to 272 yen.

Shares of discount clothing chain operator Fast Retailing Co fell 0.9% to 11,590 yen, despite reporting strong profit growth Thursday and boosting its net profit outlook for the year ending August by 19%.

The figures were “encouraging, but since they were effectively in line with market forecasts they do not leave a particularly positive impression,” Dairo Murata, an analyst with Credit Suisse in Tokyo, said in a note to clients.

Other retailers fared better, with Seven & i Holdings Co jumping 2.4% to 2,120 yen and department store operator Takashimaya Co up 2.7% at 717 yen.

In currencies, the dollar was trading at 92.71 yen from 93.02 yen late Thursday. The euro stood at $1.3912 from $1.4018.

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7 Comments

JohnBecker at 01:10 AM JST - 11th July

Get used to it... this is going to continue until the BoJ starts dumping yen on the market.
some14some at 06:30 AM JST - 11th July

BOJ action not needed now. First wait for overseas demand for j-products then let J-auto-electronic makers restart the production and hire employees...! Should the need arise BOJ may intervene and buy unwanted US$.
rajakumar at 06:25 AM JST - 12th July

Toshiba and Fujitsu ask employees to quit 2nd job,this is good news that global economy/N225 is getting better.
mousepotato464 at 07:21 PM JST - 12th July

Where and when will it stop? My guess March 15th 2011 at 79 yen to $1 slow and gradual
griff at 07:24 PM JST - 12th July

if the yen rises through the summer it'll be great for me!
Sarge at 08:37 PM JST - 12th July

"if the yen rises through the summer it'll be great for me!"

Must be you don't work for my company.
sfjp330 at 08:29 AM JST - 14th July

Japan stocks will not see a growth until U.S. economy improves. Japanese government should review and see if there might be a possiblity of lowering the capital gain tax on sales of stocks. The changes are neccesary for wealthy seniors and young professionals who are looking for stock investment options.