Thursday, 20 August 2015 09:48
TOKYO: Tokyo stocks fell 0.61 percent Thursday morning as the yen strengthened against the dollar, hitting exporter shares, and as fears over China’s economic prospects dampened sentiment.
The Nikkei 225 index at the Tokyo Stock Exchange fell 122.49 points to 20,100.14 yen by the break, while the Topix index of all first-section shares fell 0.94 percent, or 15.42 points, to 1,633.06.
“The uncertain outlook surrounding China and the nearing US rate hike is weighing on the market,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments.
“With many investors still away on summer break and with volumes low, small selling is compounding the drop.”
US policy makers said in July that they need to see further improvement in the labour market and inflation rate before raising interest rates for the first time in nearly nine years, minutes from the Federal Reserve’s meeting showed Wednesday.
“The Fed is lacking decisive reasons to raise rates,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management, told Bloomberg News.
“Concerns about the global economy are a burden, and cheaper oil increases concerns about global growth.”
US stocks fell Wednesday, with petroleum-linked equities hit especially hard in the face of growing fears about the slowing Chinese economy.
The Dow Jones Industrial Average fell 0.93 percent, the broad-based S&P 500 dropped 0.83 percent while the Nasdaq lost 0.80 percent.
China worries have dominated Tokyo share trading since the central bank unexpectedly devalued the currency last week, on the heels of six weeks of volatility in Shanghai stocks.
A pickup in the yen against the dollar took the wind out of some exporter shares, with Toyota falling 1.97 percent to 7,741.0 yen and Sony off 2.67 percent at 3,242.5 yen.
SoftBank, however, jumped 2.98 percent to 7,700 yen after its successor-in-waiting said late Wednesday he would buy a whopping $ 483 million in company shares, after his move to the Japanese mobile carrier from Google.
Nikesh Arora, who left a high-profile post at the Internet search giant last year, said he would buy 60 billion yen worth of SoftBank stock over the next six months in what he described as a “personal bet” on the company’s prospects.
On currency markets, the dollar bought 123.92 yen, slightly up from 123.89 yen in New York, but sharply down from 124.32 yen in Asian trading on Wednesday before the Fed minutes’ release.
