Japan's Nikkei average lost 2.6 percent on Thursday to hit a two-week closing low as exporters slid on a firmer yen and renewed concerns about the US economy, while Nikon Corp tumbled after it forecast its first annual operating loss in 11 years. Panasonic Corp dropped after a newspaper said the consumer electronics maker was likely to post a net loss of more than $1.1 billion this financial year.
Sales at US retailers fell for a second straight month in April, breaking a string of more upbeat reports that had suggested the economic slump was abating and helping to push the Dow Jones industrial average down 2.2 percent on Wednesday. "The recent stock market surge has been fed by steadily improving fundamentals, notably those from the United States," said Takashi Kamiya, chief economist at T&D Asset Management.
"Yesterday's downbeat US retail sales numbers poured cold water on the surge. The market is watching whether signs continue to point towards an economic recovery, with a particular focus on the upcoming US ISM numbers." The US Institute of Supply Management manufacturing index rose for the fourth straight month in April to its highest reading since September.
The May reading is due at the beginning of next month. Market watchers said a combination of a stronger yen and lower US stocks dented recent short-covering momentum, which had helped propel the Nikkei to a six-month closing high on Monday, prompting some participants to offload positions in stock futures.
The market was weighed down by losses on US bourses the previous day and the yen's appreciation, which prompted some players to sell stock futures while covering shorts in government bond futures, said Yutaka Miura, senior technical analyst at Mizuho Securities. Japanese government bond 10-year futures surged nearly half a point on Thursday after hitting a 6-1/2-month low the previous day.
The benchmark Nikkei fell 246.76 points to 9,093.73, its lowest close since May 1. It had hit a six-month closing high of 9,451.98 on Monday. The broader Topix slid 2.9 percent to 862.66. Exporters fell as investors fret over a stronger yen, which curbs their profits when repatriated. The dollar fell as low as 95.14 yen on trading platform EBS, its lowest since March 20.
Toyota Motor Corp, the world's biggest automaker, skidded 4.1 percent to 3,510 yen, while Canon Inc declined 4.8 percent to 3,150 yen. Nikon, a Japanese camera and precision equipment maker, sank 8.4 percent to 1,356 yen after forecasting an annual operating loss as chipmakers slash spending, although the loss was smaller than market expectations. Panasonic declined 4.4 percent to 1,389 yen.
Nippon Telegraph and Telephone Corp gained 1.8 percent to 3,960 yen after it reported an operating profit of 1.1 trillion yen ($11.5 billion) for the financial year ended March 31. Stocks affected by a reshuffle in the MSCI Barra's Japan Index were actively traded. Chipmaker NEC Electronics plunged 10.8 percent to 923 yen after being dropped while car battery maker GS Yuasa Corp shed earlier gains and dropped 1.2 percent to 674 yen after being included.
Rinnai Corp, a maker of gas appliances, and McDonald's Holdings Co (Japan) rose after their inclusion in MSCI Barra's Japan Index. Rinnai gained 2.5 percent to 4,030 yen and McDonald's Holdings added 4.8 percent to 1,928 yen. Consumer loan firm Takefuji Corp, which was dropped from the MSCI Japan Index, lost 4.8 percent to 580 yen.
Comments
Comments are closed.