SH: Nikkei extends losses as euro's fall dulls market mood
TOKYO, Jan. 6 (Xinhua) -- Tokyo stocks extended losses Friday, with the benchmark Nikkei stock index falling 1.16 percent as investors grew increasingly anxious about the escalating debt crisis in the eurozone and the decline of its currency.
Strategists here said the euro falling to a near 11-year low against the Japanese currency underpinned market fears about the depth of the sovereign debt crisis in the 17-nation single currency bloc.
The single European currency moved within the upper to mid-98 yen range in Tokyo during trading hours today, inching up from a fresh 11-year low of 98.46 yen logged in New York overnight.
The euro remained under pressure in Tokyo, despite a largely successful bond auction in France, although analysts here noted that the potential still exists for France to have its stellar AAA credit rating downgraded on rising borrowing costs and amid political uncertainty.
Sentiment was also dashed by Korea's Kospi index losing ground, Tokyo-based brokers said, and a circumspect mood prevailed as investors hit the sidelines ahead of a key jobs report due out from the U.S. later in the day.
Market players added that with France's auction in the rear view mirror, all eyes were now on auctions in Spain and Italy and a key meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel next week.
"We knew last year that Europe's problems were being pushed back to the beginning of this year and market participants remain worried about Italian and Spanish bond sales next week," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
"It looks like the Nikkei will be weak for the time being in this environment," Miura said.
The 225-issue Nikkei Stock Average lost 98.36 points from Thursday to 8,390.35, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 6.68 points, or 0. 91 percent, to finish at 729.60.
Export-related issues with a wide expose to European markets comprised the day's notable decliners, with consumer electronics giant Sony Corp. losing 2.0 percent to 1,345 yen, while camera maker Nikon fell 1.0 percent to 1,716 yen.
Home appliance maker JVC Kenwood Corp. surged 9.2 percent to 286 yen however following news that Panasonic Corp. will sell its stake in the firm. Panasonic, for its part, shed 0.3 percent to end the week at 654 yen.
Also in the spotlight on the final trading day of the week were Japan's chipmakers who have been pressured by falling prices and slumping demand.
Nomura Holdings Inc.'s cutting its growth forecast for global shipments of DRAM chips citing falling costs helped send chip- related shares lower and chip tester maker Advantest Corp. lost 3. 3 percent to 706 yen, while Renesas lost 3 percent to 455 yen. Elpida Memory also lost ground following Deutsche Bank AG 's cutting its stock price estimate on the firm by 100 yen and the DRAM maker dropped 5.4 percent to close at 331 yen.
Trading volume on Friday rose to 1.54 billion shares on the Tokyo Exchange's First Section, up from Thursday's volume of 1.25 billion shares, with declining issues outnumbering declining ones by 1,152 to 354.
