Nikkei closes lower for 4th straight day as yen's rise dents sentiment

Source: Xinhua| 2019-08-07 18:54:07|Editor: Shi Yinglun
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TOKYO, Aug. 7 (Xinhua) -- Japan's benchmark Nikkei stock index closed lower for a fourth straight day Wednesday, as the strength of the yen weighed on investor sentiment amid ongoing concerns about global trade issues.

The 225-issue Nikkei Stock Average lost 68.75 points, or 0.33 percent, from Tuesday to close the day at 20,516.56.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 0.70 point, or 0.05 percent, to finish at 1,499.93.

A comparatively firm yen against the U.S. dollar saw Tokyo stocks pressured from the off, despite an encouraging lead from Wall Street overnight, local brokers said.

They said that along with heightening concerns about global trade issues, the yen's strength dented market sentiment and raised concerns about the outlook for some Japanese companies, particularly exporters.

Exporters typically rely on a weaker yen to boost profits when they are repatriated from overseas. A weaker currency also keeps Japanese exporters more competitiveness in foreign markets. A firm yen, particularly against the U.S. dollar, but against a basket of other major currencies including the euro, does the opposite, investment strategists here highlighted.

The U.S. dollar was pegged in the lower 106 yen zone in Tokyo on Wednesday, as trade concerns continued to weigh on market players who also had to contend with a rate cut by New Zealand's central bank that was larger than median forecasts, they added.

The dollar was quoted at 106.29-30 yen at 5 p.m. local time compared with 106.42-52 yen in New York and 106.37-38 yen at 5 p.m. on Tuesday in Tokyo.

It tracked between 105.94 yen and 106.45 yen during the day, trading most often at the 106.15 yen mark.

The euro, meanwhile, fetched 1.1189-1190 dollars and 118.93-97 yen against 1.1197-1207 dollars and 119.26-36 yen in New York and 1.1214-1215 dollars and 119.29-33 yen in late Tuesday afternoon trade in Tokyo.

Despite the yen's firmness, some investors bought back issues in later trade helping to trim overall losses, but major chipmakers closed lower on concerns over the outlook for the global economy, as did other bellwether stocks here.

Sumco tumbled 9.3 percent, after its earnings report missed expectations, with the firm saying trade issues had impacted demand.

Advantest lost 4.8 percent and Taiyo Yuden slumped 5.0 percent on concerns over a possible slowdown in global demand.

Among other stocks sensitive to global issues, Hitachi Construction Machinery retreated 1.9 percent and industrial robotics maker Yaskawa Electric lost 2.5 percent.

By the close of play, metal product, farm and fishery, and iron and steel-linked issues comprised those that declined the most, and issues that fell outpaced those that rose by 1,060 to 1,003 on the First Section, while 86 ended the day unchanged.

On the main section on Wednesday, 1,283.07 million shares changed hands, dropping from Tuesday's volume of 1,523.42 million shares.

The turnover on the third trading day of the week came to 2,239.6 billion yen (21.07 billion U.S. dollars).