Tokyo stocks close sharply lower on weak earnings, coronavirus concerns

Source: Xinhua| 2020-07-31 19:07:09|Editor: huaxia

TOKYO, July 31 (Xinhua) -- Tokyo stocks closed sharply lower Friday as the yen's strength against the U.S. dollar weighed on exporters, while disappointing corporate earnings and rising coronavirus cases added to a downbeat mood.

The 225-issue Nikkei Stock Average dropped 629.23 points, or 2.82 percent, from Thursday to close the day at 21,710.00.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 43.41 points, or 2.82 percent, to finish at 1,496.06.

Data released Thursday showing the the U.S. economy contracted by 32.9 percent in the second quarter, marking the sharpest decline since the Great Depression, dented investor sentiment and underscored concerns over the world's largest economy's ability to recover from the pandemic and broader concerns over the pace of the global economic recovery.

With the jobless situation also worsening in the United States, investors piled into safe-haven assets like the Japanese yen, which pushed its value up against the U.S. currency.

The U.S. dollar dropped to 104.20 yen at one point during trading hours, marking its lowest level in more than four months.

Concerns over Tokyo's coronavirus situation continued as Tokyo Governor Koike Yuriko confirmed 463 new coronavirus infections in the capital on Friday, with the figure marking a new record daily increase, eclipsing the the previous single-day record of 367 on Thursday.

The cumulative total of COVID-19 cases in the capital now stands at 12,691, more than 50 percent of which were confirmed this month, as fears rise about the aggressive pace of the virus' continued spread in the capital.

With the latest daily figure marking the first time cases have topped the 400-mark in Tokyo, Koike said if the situation continues to worsen, the Tokyo metropolitan government will have to consider declaring a state of emergency in the capital so that more robust measures can be taken to tackle the spread of the virus.

"The rising infections are diminishing hopes for early economic recovery. And weak growth in major economies as well as the sluggish performance of domestic companies reminded investors of how serious the viral damage is," Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

By the close of play, rubber product, marine transportation and mining issues comprised those that declined the most.

Companies reporting subpar earnings lost ground, with Panasonic Corp. plunging 13.3 percent after saying it expects its net profit to tumble 55.7 percent and operating profit to drop 48.9 percent for the full year ending next March.

The firm also said it expects sales to drop 13.2 percent for the year to March.

Advantest fell 14.9 percent, after announcing a weaker-than-expected net profit for the first quarter ended in June.

Among exporters losing ground on the yen's strength, Mitsubishi Motor lost 5.1 percent, Honda Motor dropped 5.3 percent, while Yamaha Motor ended 5.7 percent lower.

Issues that fell outpaced those that rose by 2,032 to 134 on the First Section, while seven ended the day unchanged.

On the main section on Friday, 1.678 billion shares changed hands, rising from Thursday's volume of 1.300 billion shares.

The turnover on the final trading day of the week came to 2.781 trillion yen (26.58 billion U.S. dollars). Enditem