Japan's Nikkei average inched down to its lowest close in three weeks on Thursday, erasing early gains after the yen regained strength against the dollar and Shanghai shares drifted down. The Nikkei had briefly risen in the morning as the yen slipped after US Treasury Secretary Tim Geithner said major currencies were roughly in alignment, but the effect was short-lived as the yen rebounded and dragged down Japanese shares.
"Today's moves showed how nervous investors were about the yen's strength," said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets. "Chinese economic data was roughly within expectations, and few people expect the country will have another rate hike soon, but Shanghai stocks are down and external factors are influencing Japanese stocks," Nishimura said.
The benchmark Nikkei eased 5.12 points or 0.1 percent to 9,376.48, its lowest close since September 30. The broader Topix lost 0.4 percent to 820.40. The Nikkei bounced more than 1 percent to a session high of 9,479.25 at one point in the morning session as the yen dropped on Geithner's comments.
Geithner, in an interview published by the Wall Street Journal on Thursday, said major currencies were now roughly in alignment. The Nikkei initially jumped as stock market participants thought the yen was being hammered down by currency intervention by Japanese authorities, though the movement appeared to be driven solely by Geithner's comments, traders said.
Japanese shares then struggled as the yen started to regain strength, they said. The yen rose 0.1 percent to 81.01 against the dollar, approaching a 15-year low of 80.84 yen hit in the previous session. The Japanese currency fell as far as 81.84 against the dollar after the comments by Geithner came out. The Nikkei was also undermined as Shanghai shares edged down after Chinese data showed economic growth ebbing and inflation edging higher.
China said its economic growth slowed in the third quarter but was a touch stronger than expected. Consumer inflation hit a 23-month high of 3.6 percent in September but was in line with market expectations. Currency factors are expected to drive the Nikkei, with investors closely watching for talk on foreign exchange issues at a Group of 20 meeting starting on Friday.
Trade was moderate, with 1.78 billion shares changing hands on the Tokyo exchange's first section. Declining stocks outnumbered advancers by more than 2 to 1. Shares of Central Japan Railway Co (JR Tokai) tumbled to their lowest in nearly a year on Thursday, as investors worried the firm may need to issue shares to finance its 5 trillion yen ($61.6 billion) maglev train project.
NTT Data Corp rose 1.5 percent to 250,600 yen after the Nikkei business daily reported the IT services company will buy US firm Keane Inc for more than 100 billion yen ($1.2 billion) as it looks to make a major push into the world's biggest IT market.
Comments
Comments are closed.