Tokyo stocks close lower

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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 closed down 1.04 percent on Wednesday, dragged down by profit-taking and a stronger yen following a G7 statement that warned over volatility in global forex markets.

The benchmark Nikkei 225 index lost 117.71 points to 11,251.41, while the Topix index of all first-section shares was down 1.19

percent, or 11.48 points, at 957.02.

Selling pressure emerged from the outset as the yen climbed after the G7 said on Tuesday that “excessive volatility” in exchange markets threatened financial stability, as talk of a global currency war heats up before this week's G20 talks in Moscow.

Japan's policy of monetary easing has stoked fears, especially in Europe, of a so-called “currency war” between the major economies in which policymakers devalue their currencies to make exports more competitive.

“The yen's rebound was a key factor behind the Nikkei's decline, while players cashed in on the recent gains,” said Katsuhiro Kondo, a broker with Tokai Tokyo Securities.

“Players are now looking to the G20 to check if the weak yen will be on the agenda.”

Kondo added: “The bullish momentum remains alive as foreign and individual investors are still trying to catch up with the recent boom.”

In afternoon Asian trade on Wednesday the dollar was at 93.10 yen while the euro fetched 125.20 yen, from 93.47 yen and 125.75 yen in New York on Tuesday.

The Japanese currency was much weaker on Tuesday morning, with the dollar trading above 94 yen and the euro above 126 yen.

Major exporters lost ground in Tokyo stock trading, as Sony dropped 5.57 percent to 1,304 yen while Toyota lost 1.82 percent to 4,830 yen.

Olympus fell 2.74 percent to 2,020 yen after the firm on Tuesday cut its full-year earnings forecast citing weak demand for digital cameras. - Sapa-AFP


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