business

Stocks close 2.97% lower

4 Comments

Tokyo stocks closed 2.97% lower on Friday as the dollar turned sharply lower against the yen, denting shares of major Japanese exporters.

The benchmark Nikkei 225 index ended down 432.95 points at 14,129.98, while the Topix index of all first-section shares lost 2.93%, or 35.26 points, to 1,167.06.

"The weaker dollar is the main culprit, partially on growing belief that the (U.S. Federal Reserve) will opt to keep up its easing policy and make less use of rhetoric about 'tapering' its bond-buying program, which has proved to be a powerful dollar support in the past," said an equity trading director at a foreign brokerage.

"The start to the present earnings reporting season has also not been rosy -- most likely as a result of unrealistic expectations. Players are now going to eye next week's results with even greater scrutiny, with the U.S. Fed's July 30-31 meeting also coming up," he added.

The policy meeting will provide clues as to when the Fed will start rolling back its stimulus scheme aimed at stoking the world's largest economy. A tapering of the program would mean fewer dollars in the financial system, boosting demand for the unit.

The dollar fell to its lowest level in about two weeks against the Japanese currency on Friday, trading at 98.70 yen compared with 99.24 yen in New York and well off the 100.00 yen level in Tokyo on Thursday.

The value of the yen tends to influence the Tokyo stock market as it has a direct impact on the profitability of exporters such as Toyota and Sony.

Friday's decline saw investors booking profits ahead of the weekend as the earnings season gets under way.

Also providing a little support to the yen was news that Japan logged its first monthly price rise in more than a year in June, although the hike was mainly driven by surging energy costs.

© (C) 2013 AFP

©2024 GPlusMedia Inc.

4 Comments
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Abe's stable govt has destabilized Nikkei, lost 3.2% after LDP's upper house election victory.

-2 ( +2 / -4 )

Abe's stable govt has destabilized Nikkei, lost 3.2% after LDP's upper house election victory.

I don't think that money think about Abe. It's because of continiung lowering of Yen as well as balance sheets from the big companies being announced soon. So who fears - sells.

0 ( +0 / -0 )

The value of the yen tends to influence the Tokyo stock market as it has a direct impact on the profitability of exporters such as Toyota and Sony.

It's much simpler than "the profitability of exporters". If people think the value of their yen cash will decline (thanks almost entirely to Abe's suicidal policies), they'll pour their money into the stock market in hopes of preserving its value.

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Abe's stable govt has destabilized Nikkei, lost 3.2% after LDP's upper house election victory.

Ah the Nikkei is up 50-80% so no.

1 ( +1 / -0 )

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