Tokyo shares close down

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JapanBrokerage REUTERS A man looks at his watch as he passes an electronic board displaying a graph of currency rates outside a brokerage in Tokyo.

Tokyo - Tokyo stocks slipped 0.59 percent Tuesday on profit-taking as investors weighed the effect on exporters of a solid yen against a record close on Wall Street.

The Nikkei 225 index at the Tokyo Stock Exchange fell 92.03 points to 15,521.22, while the Topix index of all first-section issues was down 0.49 percent, or 6.30 points, at 1,285.01.

“The dollar fell (against the yen) and futures are trading below yesterday's finish, leaving the market ripe for profit-taking,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

The dollar was at 103.87 yen in afternoon Tokyo trade, down from 104.01 yen in New York Monday afternoon as its recent rally in anticipation of higher US interest rates ran out of steam.

The US unit touched a seven-month high of around 104.20 yen in Tokyo Monday.

A strong yen tends to drag down Japanese stocks because it works against exporters, making them less competitive abroad and reducing the yen value of repatriated profits.

“One reason for the lethargy is the very conservative corporate guidance, which keeps expectations for stock prices largely under wraps,” Brian Heywood, chief executive at Taiyo Pacific Partners, told Dow Jones Newswires.

Consistently bullish movements in US markets are nevertheless alarming, he added.

“Much of the buying in US shares... could face correction quickly if sentiment goes sour,” he said.

“On the other hand... cheap valuations certainly leave room for more Japan share buying, (while) the threat of a sudden sell-off overseas - and a Japan knee-jerk reaction - will not go away,” he said.

US stocks were broadly higher Monday, bolstered by the Federal Reserve's caution over raising rates and a handful of new merger deals.

The S&P 500 index closed up 0.48 percent at 1,997.92, after topping the 2,000 mark for the first time.

The Dow rose 0.44 percent.

In Tokyo, Sony was down 0.81 percent at 1,956.0 while Mitsubishi Motors closed unchanged at 1,184.0. - Sapa-AFP


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