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Tokyo shares sink as strong yen hits exporters

AFP

Tokyo stocks tumbled for a fourth session Friday, with automakers among the worst hit as the yen soared against the dollar, with a strong lead from New York unable to temper the sell-off.

The greenback has been hammered on foreign exchange markets since the Federal Reserve Wednesday lowered its interest rate forecasts for this year, citing weak global growth and the recent turbulence across markets.

On Friday it bought 111.33 yen, down from 111.44 yen in New York -- where it at one point plunged as low as 110.67 yen, its lowest since October 2014. It is also well off the 113.71 yen Wednesday in Asia before the Fed decision.

"There's concern for exporters' earnings," Nobuyuki Fujimoto, a senior market analyst at SBI Securities, told Bloomberg News.

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"If the yen's trading around 114 to the dollar then companies will expect profits next fiscal year, but when it's 110, most exporters will post losses."

Tokyo's benchmark Nikkei 225 index fell 1.25 percent, or 211.57 points, to close at 16,724.81. It declined 1.26 percent over the week.

The broader Topix index of all first-section shares gave up 1.02 percent, or 13.92 points, at 1,345.05. Over the week, the index lost 1.05 percent.

Japanese markets, closed on Monday for a national holiday, will look to the latest inflation figures for trading cues next week.

On Friday, exporters were among the biggest losers as the stronger yen makes their goods more expensive oversea. It hurts their repatriated profits in March as the start of a new fiscal year in April approaches.

"I think the appreciation of the yen is temporary and in April the yen will stabilise," Ayako Sera, a market strategist at Sumitomo Trust Bank, told AFP.

Toyota lost 2.27 percent to 5,888 yen, while Nissan dropped 1.75 percent to 1,061 yen, Honda slipped 1.00 percent to 3,058 yen and Suzuki was off 0.49 percent at 3,018 yen.

Among other firms China-linked industrial robot maker Fanuc slumped 1.88 percent to 17,230 yen, while market heavyweight Fast Retailing fell 2.03 percent to 35,120 yen.

Telecom carrier SoftBank declined 2.12 percent to 5,620 yen and Mitsubishi UFJ Financial Group lost 1.08 percent to 547.7 yen.

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