TOKYO: Tokyo stocks were flat Friday morning, as optimism on New York markets was all-but cancelled out by a stronger yen and lingering concerns over the US economy.
The benchmark Nikkei 225 index eased 8.21 points to 14,578.30 by the break, while the Topix index of all first-section shares was also flat, dipping 0.66 points to 1,205.59.
The lacklustre trade came after US investors powered the S&P 500 to an all-time high Thursday, one day after Washington politicians reached a deal to reopen the government and avert a debt default.
But the Tokyo market was still weighed down by worries over the US economy, analysts said.
"There are concerns about a potential slowdown of the US economic recovery as a result of the US government shutdown and the fiscal deadlock," said Yoshihiro Okumura, general manager for research at Chibagin Asset Management.
"Also, as the US recovery does not appear to have gained solid footing, the US monetary easing will likely be in place for the near-term, which will cap the dollar's rise," he told Dow Jones Newswires.
A strong yen is negative for Japanese exporters as it makes their products less competitive abroad and erodes repatriated profits.
The dollar bought 98.04 yen early Friday, marginally up from 97.91 yen in New York, but well below the mid-98 yen range in Tokyo earlier Thursday.
The euro bought $1.3661 and 133.94 yen compared with $1.3677 and 133.92 yen.
Automakers were lower, with Toyota Motor sliding 0.63 percent to 6,300 yen and Honda Motor down 0.50 percent at 3,930 yen.
However, the dollar may not be a significant driver to lift auto shares, said Hiromichi Tamura, chief strategist at Nomura Securities.
Auto makers will likely post better-than-expected second quarter earnings thanks to strong sales in the US and a generally weaker yen, which will drive share prices higher, he said.
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