Tokyo stocks down by break as strong yen bites

Tokyo stocks slipped in low-volume trading Wednesday morning ahead of a public holiday with the stronger yen taking the wind out of exporters including Toyota and cosmetics maker Shiseido.

The make-up giant was the latest Japanese firm to warn that a sharp rally in the yen is hitting profits, as the country's quarterly earnings season draws to a close.

Shiseido shares plummeted 7.6 percent after it cut its full-year forecast the previous day, blaming the yen's rise.

The dollar-yen rate lost more ground Wednesday as news that US quarterly productivity had fallen again dented expectations for a Federal Reserve interest rate hike this year.

A strong yen is a negative for Japanese shares, as it dampens the overseas profitability of exporters.

The greenback slumped to 101.40 yen on Wednesday from 101.88 yen in New York and 102.44 yen in Tokyo earlier Tuesday.

"It's going to be quite tough for Japan with the yen strengthening," Nicholas Teo, a Singapore-based strategist at KGI Fraser Securities, told Bloomberg News.

By the break, the benchmark Nikkei 225 index was down 0.29 percent, or 48.39 points, at 16,716.58, after two days of gains.

The broader Topix index of all first-section shares fell 0.41 percent, or 5.38 points, to 1,312.11.

Japan Display, which makes screens for Apple's mobile gadgets, tumbled 5.17 percent to 165 yen. The Wall Street Journal reported that the struggling firm was seeking government loans as its business is hit by sinking orders from the US tech giant and the strong yen.

Toyota fell 0.63 percent to 5,973 yen, rival Honda shed 1.23 percent to 2,955 yen and factory robot maker Fanuc eased 0.43 percent to 17,345 yen.

However, mobile giant SoftBank bucked the downtrend, jumping 1.99 percent to 6,325 yen. The company announced earlier Wednesday it had invested in a US content streaming company but gave few details.

Japanese financial markets are closed on Thursday for a public holiday.

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