Tokyo stocks fell 0.98 percent Thursday, as investors worried about Greece's debt negotiations while a stronger yen weighed on the market, but Sony surged to a near five-year high after lifting its earnings outlook. The Nikkei 225 index at the Tokyo Stock Exchange lost 174.12 points to finish at 17,504.62, while the Topix index of all first-section shares slipped 0.49 percent, or 6.89 points, to 1,410.11.
US shares gave up late gains Wednesday after the European Central Bank put fresh pressure on Athens by stopping Greek lenders from using government bonds as collateral, cutting off a much-needed line of credit. That dented hopes for a quick deal on renegotiating its 240-billion-euro international rescue. The Dow, which had surged during the day, ended flat, while the S&P 500 fell 0.42 percent and the Nasdaq lost 0.23 percent.
Investors were rattled by the ECB's announcement Wednesday that it would no longer allow Greek banks to use government debt, which has a junk rating, as collateral for loans. Under the terms of its bailout, Greek banks had been given a waiver to use government bonds - which have a junk rating - as collateral as long as Athens stuck to its obligations. The ECB said it was no longer confident Athens could show it was meeting bailout programme requirements.
The dollar was at 117.14 yen Thursday afternoon, against 117.18 yen in US trade, and well off Wednesday's level around 117.74 yen. Toyota shares fell 0.95 percent to 7,654.0 yen, despite the world's biggest automaker on Wednesday raising its full-year net profit forecast to a record $18.1 billion. Hitachi plunged 9.87 percent to 781.0 yen after the trains-to-elevators conglomerate missed third-quarter profit expectations. And energy giant Inpex fell 3.98 percent to 1,360.5 yen after global oil prices slid Wednesday following a three-day rally.
However, Sony surged 12 percent to 3,101.5 yen, its highest finish in almost five years, after saying Wednesday it now expects to lose 170 billion yen in its fiscal year to March, a hefty shortfall but less than an earlier 230 billion yen estimate. It also projected an operating profit of 20 billion yen, turning around an October forecast that it would lose 40 billion yen.