CN: Nikkei closes at nearly 9-month low on strong yen, economic worries
(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, Aug. 17 -- (Kyodo) _ (EDS: CHANGING HEADLINE, ADDING DETAILS AND PRICES) Japan's key Nikkei index closed at a nearly nine-month low on Tuesday as the yen's strength against the dollar continued to weigh on the market amid concern about economic growth at home and abroad.
After falling close to the 13-month intraday low logged last week, however, stocks trimmed losses on media reports that Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa are likely to meet next Monday in response to the recent rise in the yen.
The 225-issue Nikkei Stock Average fell 34.99 points, or 0.38 percent, from Monday to 9,161.68, the lowest closing since Nov. 27 when it finished at 9,081.52.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 1.85 points, or 0.22 percent, at 826.78.
Stocks traded in negative territory throughout the day as the yen's movements remained at the forefront of investors' minds, brokers said. The dollar was trading in the lower 85 yen zone compared with the upper 85 yen range late Monday in Tokyo. A strong yen erodes Japanese exporters' overseas profits when repatriated.
Brokers said speculation about buying by Japanese pension funds limited the Nikkei's fall, while the possibility of the Japanese authorities taking action to deal with the recent rise of the yen, which hit a 15-year high of 84.72 yen last week, also provided support.
"The report about the meeting (between the prime minister and BOJ chief) did not move the currency market much...but stocks trimmed losses," said Toshikazu Horiuchi, equity strategist at Cosmo Securities Co.
"For the current mood to change, we need some kind of policy action in Japan and a series of economic data that are above forecasts...because the market has been tilting toward excessive pessimism," Horiuchi added.
Investors have been closely watching currency movements, with the yen's surge raising worries about its impact on the export-reliant Japanese economy, which saw far weaker growth than expected in the April to June period.
The release overnight of weaker-than-expected U.S. economic indicators for the housing and manufacturing sectors added to the gloom amid investor concern that the global economic recovery is losing momentum.
"The focus is on whether the Nikkei will be able to hold above 9,000 when the dollar falls into the 84 yen range," said Fumiyuki Nakanishi, general manager at SMBC Friend Securities Co.
"It's hard to buy (stocks) when we aren't sure about how the yen will move," Nakanishi said, adding that upcoming U.S. economic data, including housing starts, will be in focus as the recent series of data have painted a bearish picture of economic conditions.
On the First Section, decliners outnumbered advancers 846 to 647, with 171 issues remaining unchanged.
The mining sector led the decline, followed by the fishery and forestry, and glass and ceramics sectors. Gainers included real estate, consumer finance, and electricity and gas issues.
Exporter stocks were lackluster. Electronic parts maker TDK lost 60 yen, or more than 1 percent, to 4,490 yen, and Olympus shed 45 yen, or some 2 percent, to 2,166 yen. Toyota Motor was down 20 yen, or more than half a percent, to 3,005 yen.
Value leader Inpex slid 17,500 yen, or nearly 4.5 percent, to 378,500 yen, and volume leader Mizuho Financial Group remained unchanged from Monday's close at 134 yen.
Despite the overall weakness in the stock market, however, "summer-linked" stocks were higher on expectations that the scorching heat in Japan will continue to boost demand for products such as ice cream and beer.
Morinaga Milk was a bright spot, climbing 6 yen, or nearly 2 percent, to 360 yen, while Asahi Breweries gained 44 yen, or roughly 3 percent, to 1,648 yen. Kirin Holdings, which on Monday reported a 50 percent drop in its group net profit in the first half of its business year through December, was up 9 yen, or around 1 percent, to 1,190 yen.
Trading volume on the main section stood at 1,290.00 million shares, down from Monday's 1,321.60 million.
The TSE's Second Section index dropped 4.17 points, or 0.20 percent, to 2,065.09 on a volume of 20.34 million shares. On the Osaka Securities Exchange, the near-term September Nikkei 225 index futures contract was down 10 points at 9,170.
