Thursday, 20 August 2015 12:04
TOKYO: Tokyo stocks fell 0.94 percent on Thursday, on fears over China’s economic prospects and after the yen strengthened against the dollar as speculation the US Federal Reserve would hike rates receded.
The Nikkei 225 index at the Tokyo Stock Exchange shed 189.11 points to close at 20,033.52, while the Topix index of all first-section shares slipped 1.49 percent, or 24.60 points, to 1,623.88.
“The uncertain outlook surrounding China and the nearing US rate hike is weighing on the market,” said Soichiro Monji, chief strategist at 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 they need to see further improvement in the labour market and inflation before raising interest rates for the first time in nearly nine years, minutes from the Federal Reserve’s July 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.
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 Thursday, with Toyota dropping 2.08 percent to 7,732 yen and Sony falling 3.04 percent to 3,230 yen.
SoftBank, however, jumped 2.20 percent to 7,642 yen after its successor-in-waiting said late Wednesday he would buy $ 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 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 edged up to 124.01 yen in late afternoon trade, against 123.89 yen in New York, but still down from 124.32 yen in Asian trading on Wednesday before the Fed minutes’ release.
