Tokyo stocks end at five-month low

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

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

Published Oct 17, 2014

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Tokyo - Tokyo stocks fell 1.40 percent to close at a five-month low on Friday, hit by a stronger yen and growing concerns about the global economy.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange lost 205.87 points to 14,532.51, its worst finish since late May.

The index has lost more than 10 percent since hitting a seven-year high of 16,374.14 just three weeks ago, suggesting the market is now in a correction phase.

It lost 5.0 percent this week alone.

The broader Topix index of all first-section issues was 1.53 percent, or 18.28 points, lower at 1,177.22.

“The risk-off sentiment we're seeing now is global, affecting all stock markets,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

“If US stocks continue to see selling, there is little chance that Japan shares won't feel the pressure as well - at least until the next US Federal Open Market Committee meeting” slated for October 29-29, he added.

Tokyo opened in positive territory as Wall Street and European shares settled after days of upheaval but the stronger yen dug into exporters, despite upbeat US data.

The dollar was down at 106.16 yen in Tokyo afternoon trade, from 106.33 yen in New York Friday.

The Department of Labor said initial jobless claims for the week ending October 11 fell to their lowest level since 2000.

Also, the Federal Reserve said industrial production rebounded in September from an unexpected drop in August.

The news helped Wall Street reverse morning losses, although the three main indexes still provided an anaemic lead.

The Dow dipped 0.15 percent, while the S&P 500 and Nasdaq were marginally higher.

On Friday in Tokyo, Bank of Japan Governor Haruhiko Kuroda warned against the government opting out of another sales tax hike next year.

Tokyo hiked the levy on April 1 - for the first time in 17 years - to raise revenue to help pay down Japan's whopping national debt, but the move has hurt a tentative recovery in the world's number three economy.

Kuroda said the market fallout from not raising taxes again next year could be dire.

Tokyo has not yet made a decision.

“If the tax hike decision were to be put off and that damages market confidence in Japan's fiscal reform efforts, it would be quite difficult for the BoJ to cope with (the market turmoil),” he told parliament.

Japan Display, the world's biggest maker of screens for smartphones and tablets, slumped 8.07 percent to end at 330.0 yen - after plunging more than 18 percent on Thursday - following a loss warning.

Temporary staffing firm Recruit Holdings rose 6.45 percent to 3,545.0 yen, after surging 7.4 percent on its market debut Thursday.

Toyota fell 2.51 percent to 5,731.0 yen while Canon slipped 1.89 percent to 3,180.0 yen. - Sapa-AFP

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