Tokyo stocks closed lower Tuesday as a rebounding yen hit exporters, while Toyota lost early gains driven by news of a major investment in the United States. After a public holiday Monday, the Japanese market dropped at the start as falling oil prices and fresh Brexit concerns dented investor sentiment. Tokyo's benchmark Nikkei 225 index slipped 0.79 percent, or 152.89 points, to end the day at 19,301.44 while the broader Topix index of all first-section issues was down 0.71 percent, or 11.01 points, to finish at 1,542.31.
Risk aversion spiked and the pound hit a three month low after British Prime Minister Theresa May insisted over the weekend that Britain would have control over its borders after Brexit, suggesting she would be prepared to quit Europe's trading zone to achieve it. In currency trading, the dollar was quoted at 115.50 yen Tuesday against 116.07 yen in New York. A stronger yen is a negative for Japanese shares.
"It seems investors have started to sell off some of the positions they had built during the Trump rally around the end of last year," said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities in Tokyo. "It's easier for exporters that were bought in the rally to be sold," he told Bloomberg News. Investors were also nervous ahead of US president-elect Donald Trump's press briefing in New York Wednesday, his first since July.
Players were "hesitant to chase higher prices as they are strongly inclined to see what will come out of Mr Trump's press conference," Okasan Online Securities chief strategist Yoshihiro Ito said in a note. At the close, Honda shares were down 1.11 percent to sit at 3,462 yen while Fast Retailing dropped 2.59 percent to 38,690 yen in reaction to a drop in December sales at its Uniqlo stores in Japan. Toyota closed 0.99 percent lower at 6,861 yen after losing early gains. The giant automaker on Monday announced it will invest $10 billion in the United States over the next five years. That came days after Trump criticised the Japanese automaker for a previously-announced relocation of Toyota Corolla production to Mexico.
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