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Tokyo stocks close lower as stronger yen hits exporters

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by August 10, 2016 General
PHOTO / YOSHIKAZU TSUNO / AFP

PHOTO / YOSHIKAZU TSUNO / AFP

Tokyo’s benchmark stock index closed lower in thin trading Wednesday, snapping a two-day rally ahead of a public holiday with the stronger yen hitting exporters including Toyota and cosmetics maker Shiseido.

The make-up giant was the latest Japanese firm to warn that a sharp rise in the yen was hitting profits, as the country’s quarterly earnings season draws to a close.

Shiseido shares plummeted 7.5 percent after it cut its full-year profit forecast the previous day, blaming the yen’s rise.

The dollar-yen rate lost more ground Wednesday as news that US quarterly productivity had fallen for the third consecutive quarter and dented expectations for a Federal Reserve interest rate hike this year.

A strong yen is a negative for Japanese shares, as it dampens the overseas profitability of exporters.

The greenback slumped to 101.33 yen on Wednesday from 101.88 yen in New York and 102.44 yen in Tokyo earlier Tuesday.

“It’s going to be quite tough for Japan with the yen strengthening,” Nicholas Teo, a Singapore-based strategist at KGI Fraser Securities, told Bloomberg News.

The Nikkei 225 at the Tokyo Stock Exchange slipped 0.18 percent, or 29.85 points, to finish at 16,735.12.

The broader Topix index of all first-section shares lost 0.20 percent, or 2.66 points, to 1,314.83.

Japan Display, which makes screens for Apple’s mobile gadgets, tumbled 5.74 percent to 164 yen. The Wall Street Journal reported that the struggling firm was seeking government loans as its business is hit by sinking orders from the US tech giant and the strong yen.

Toyota fell 1.11 percent to 5,944 yen, rival Honda shed 1.01 percent to 2,961.5 yen and factory robot maker Fanuc eased 0.60 percent to 17,315 yen.

However, mobile giant SoftBank bucked the downtrend, jumping 2.62 percent to 6,364 yen. The company announced earlier Wednesday it had invested in a US content streaming company but gave few details.

Japanese financial markets are closed on Thursday for a public holiday.

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