Tokyo stocks close lower as strong yen weighs on exporters, earnings outooks

Source: Xinhua| 2018-01-25 17:05:31|Editor: ZD
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TOKYO, Jan. 25 (Xinhua) -- Tokyo stocks closed lower Thursday as the strength of the yen against the U.S. dollar weighed on exporter issues and prompted concerns about corporate earnings and outlooks here.

The 225-issue Nikkei Stock Average dropped 271.29 points, or 1.13 percent, from Wednesday to close the day at 23,669.49, marking its lowest closing level since Jan. 12.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 16.67 points, or 0.88 percent, to finish at 1,884.56.

Market strategists here said the yen's rise against the U.S. dollar following U.S. Treasury Secretary Steven Mnuchin declaring a weaker U.S. dollar would be better for the nation's trade weighed heavily on exporter issues here.

The U.S. dollar dropped below the 110 line at one point during trading hours following Mnuchin's remarks Wednesday, this compared to many Japanese companies' pegging their outlooks this fiscal year at the U.S. dollar averaging 110.18 yen.

Firms with a sizable exposure to overseas markets suffer when the yen rises against other major currencies as profits are eroded when repatriated and earnings outlooks become murky.

The firm yen on Thursday also led to some investors opting to take profits on issues that had gained recently, local brokers said, amid a cautious stance on future currency moves pertaining to the possibility of global trade issues.

Along with exporters, retailers also lost ground on concerns the strength of the yen could negatively influence tourist foot flow to Japan and their spending.

By the close of play, air transportation, electric appliance and machinery-linked issues comprised those that declined the most, and falling issues beat rising ones by 1,519 to 462 on the First Section, with 82 ending the day unchanged.

On the main section on Thursday, 1,563.33 million shares changed hands, rising from Wednesday's volume of 1,523.56 million shares.

The turnover on the penultimate trading day of the week came to 2,962.6 billion yen (27.16 billion U.S. dollars).