Stocks lost ground on the Tokyo Stock Exchange Friday, with investor sentiment dampened by the yen’s strengthening against the dollar.
The benchmark Nikkei 225 average fell 121.70 points, or 0.63 percent, to close at 19,274.82. On Thursday, the key market gauge rose 38.55 points.
The Topix, including all first-section issues, ended down 4.70 points, or 0.29 percent, at 1,593.54, after gaining 6.24 points the previous day.
Selling outpaced buying as the dollar weakened against the yen in response to a plunge in U.S. long-term interest rates, brokers said.
The key 10-year U.S. Treasury yield took a blow partly from long-term interest rate falls in Europe prompted by European Central Bank President Mario Draghi’s remarks after the ECB’s policy-setting meeting suggesting that the bank will next month start discussing tapering of its bond purchases, market sources said.
The Tokyo market accelerated its downswing in the afternoon, dragged further down by the dollar’s fall below ¥108.
Before sinking deeper in negative territory around midafternoon, “stocks did not drop as much as expected despite the negative effects from the yen’s rise and U.S. equities’ overnight weakness,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Investors seemed to have difficulty either buying or selling stocks due to the possibility of North Korea carrying out another provocation over the weekend, Miura pointed out.
Hideyuki Suzuki, head of the investment market research department at SBI Securities Co., attributed the late afternoon plunge to selling by those who took the dollar’s drop as somewhat excessive.
Falling issues far outnumbered falling ones 1,247 to 678 in the TSE’s first section, while 101 issues were unchanged.
Volume rose to 1.860 billion shares, from 1.526 billion shares on Thursday.
Insurers, including Sompo Holdings, Sony Financial, MS&AD and Dai-ichi Life, regional bank Concordia Financial and megabank group Resona, were downbeat on the U.S. interest rate drop.
Home builder Sekisui House met with selling on concern over future earnings although it posted a larger profit for the first half of fiscal 2017.
Brewers Asahi and Kirin lost ground on sluggish beer sales in August.
By contrast, Ono Pharmaceutical was buoyant on positive clinical trial results for its U.S. partner’s anticancer drug.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average fell 110 points to 19,140.