Tokyo shares drop on stronger yen, China economy worries

Tokyo shares fell Tuesday as a stronger yen hit exporters, while a slump in China's exports reignited worries about a slowdown in the world's second-largest economy. China's exports saw their heaviest fall in nearly seven years in February, raising fears of a "hard landing" for the world's biggest trader of goods and a key driver of global growth. In Tokyo, the market appeared to shrug off data that showed Japan's economy shrank 0.3 percent in the final quarter of last year, less than originally estimated.
The official figures reflected better-than-expected corporate investment and the effect of government spending, although the outlook for Japan's economy this year remains bleak. On currency markets, the dollar eased to 113.13 yen from 113.41 yen in New York. The greenback briefly touched 112.75 yen, its lowest level in a week against Japan's currency. A stronger yen is bad for the profitability of Japanese exporters and tends to dent demand for their shares.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange slipped 0.76 percent, or 128.17 points, to close at 16,783.15 yen, while the broader Topix index of all first-section shares fell 1.04 percent, or 14.18 points, to 1,347.72. Japanese shares were hammered at the start of the year in the midst of a global equities bloodbath and analysts cautioned that investors are still on edge. "The market's all over the place, and investors can't be fully risk-on," Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank, told Bloomberg News.
"Even if there's good data, there's still a strong sense of concern." China's customs figures showed exports sank more than 25 percent on-year to $126.1 billion, while imports were down by nearly 14 percent to $93.6 billion. Toyota shares fell 1.80 percent to 5,990 yen and Sony slipped 1.72 percent to 2,569.5 yen. Uniqlo operator Fast Retailing, a market heavyweight, edged 0.20 percent lower to 34,420 yen. SoftBank bucked the downtrend, however, as investors gave a thumbs up to news on Monday that the mobile carrier plans to split its Japanese and overseas operations. SoftBank shares closed 1.68 percent higher at 5,851 yen.