Tokyo stocks dropped 2.75 percent on Friday with exporter shares taking a hit from the rising yen as investors grew increasingly cautious by the end of the session. The benchmark Nikkei 225 index fell 398.22 points to 14,088.19, while the Topix index of all first-section shares was down 2.08 percent, or 25.07 points, to 1,178.28.
"There's no single obvious catalyst to point at for the selloff," said Monex market analyst Toshiyuki Kanayama. "Shares had been overbought lately and disappointment over the likely postponement of US Fed tapering are the most salient culprits, along with Chinese share weakness. "On paper, the dollar is not that much weaker than prior day levels, but expectations often count more for stocks."
In Tokyo currency trading Friday, the dollar was at 97.04 yen, down from 97.29 yen in New York on Thursday, with the greenback under pressure over speculation the US Federal Reserve would delay winding down its monetary easing plan. A stronger yen is a negative for Japanese exporters as it makes their products less competitive abroad and erodes the value of foreign income when it is repatriated. Markets were little moved after the Japanese government released data showing the nation's consumer prices, excluding volatile prices of fresh food, posted an on-year rise for the fourth consecutive month in September.
In share trading, major exporters lost ground with Toyota down 2.05 percent to 6,200 yen, while Sony fell 1.12 percent to 1,851 yen and Panasonic lost 1.49 percent to 922 yen. Mobile carrier SoftBank fell 4.76 percent to 7,400 yen following a report that Chinese e-commerce giant Alibaba was delaying plans for a giant initial public offering. SoftBank owns about one-third of the Internet giant and would benefit from any share sale. Mizuho Financial Group lost 1.44 percent to 204 yen after Japanese media said the company would punish more than 30 executives over revelations it made loans to underworld figures. Mitsubishi Motors rose 1.17 percent to 1,036 yen after the automaker hiked its net profit forecast for the fiscal year to March by about 40 percent to 70 billion yen.