Tokyo stocks down

Tokyo stocks fell 1.19 percent on Wednesday, hit by a strong yen and the International Monetary Fund's decision to slash by almost half its economic growth forecast for the country. The Nikkei 225 index at the Tokyo Stock Exchange lost 187.85 points to finish at 15,595.98, while the broader Topix index of all first-section shares fell 1.24 percent, or 16.04 points, to 1,274.85.
European and US markets finished sharply lower Tuesday after the IMF trimmed its global growth forecast and warned of stagnation in advanced economies. The news boosted the yen - which benefits in times of turmoil or uncertainty - and hurt shares of Japanese exporters.
On currency markets, the dollar spent most of the day at around 108.20 yen but climbed back in afternoon trade to fetch 108.50 yen. That compares with 108.02 yen late in New York and 108.57 yen in Tokyo earlier Tuesday. "Most of the buying of Japan shares over the past several months has come on the back of the stronger dollar, so an unwinding of dollar-long positions is going to cause this kind of backlash since fundamental buyers have been so few," said Daisuke Uno, strategist at Sumitomo Mitsui Banking.
The IMF forecast global growth this year of 3.3 percent, down 0.1 percentage points from July's estimate and 0.4 points off what it tipped in April. Its 2015 outlook was cut to 3.8 percent growth from 4.0 percent previously forecast. The new projection for 0.9 percent expansion in Japan this year is well down from the July projection of 1.6 percent.
Earlier Tuesday German data showed industrial production slumped 4.0 percent in August - the second successive day of disappointing figures out of Europe's largest economy. Looking ahead, market attention is shifting to Japanese earnings season, dealers said. "As we enter the meat of earnings reporting season, focus will be on company outlooks and the number and size of full fiscal year earnings projections," an equity trading director at a European brokerage told Dow Jones Newswires. In Tokyo, Toyota shares fell 1.79 percent to 6,252.0 yen, Sony slipped 0.10 percent to 1,915.0 yen, while Canon was off 0.67 percent at 3,479.5 yen. Japan Tobacco closed down 0.97 percent at 3,567.5 yen after it said it was mulling the closure of two European plants and reducing production at another, which could lead to about 1,100 layoffs.