Tokyo stocks hit by stronger yen, Dreamliner woes

Tokyo stocks fell 1.33 percent in the afternoon owing to a strengthening yen, while Japan's top two airlines sank after they grounded all their Boeing Dreamliner aircraft over safety fears.

The losses reversed morning gains, when the index went into the lunch break up 0.18 percent, or 19.30 points, at 10,619.74.

Market participants were trying to gauge whether the yen's recent weakening would continue, Yoshihiro Okumura, general manager of research at Chibagin Asset Management, told Dow Jones Newswires.

"Some caution was raised by policy makers against the yen's weakening," he said. "Still, with the dollar/yen where it is now, selloffs in stocks like Wednesday are unlikely." Tokyo ended down 2.56 percent on Wednesday.

The yen rebounded Tuesday after Japan's economy minister warned over the currency's rapid decline, saying it could hit consumers by making imported goods more expensive.

The dollar was at 88.25 yen in Tokyo, compared with 88.37 yen in New York Wednesday afternoon. The euro bought 117.20 yen and $1.3281 Thursday, against 117.42 yen and $1.3286 in US trade.

US stocks turned in a mixed performance, as Boeing's latest problem with its 787 Dreamliner overshadowed strong earnings from leading banks.

The Dow Jones Industrial Average finished down 23.66 points, or 0.17 percent, at 13,511.23.

In Tokyo All Nippon Airways (ANA) fell 1.64 percent to 179 yen, while Japan Airlines (JAL) was down 0.40 percent at 3,660 yen after they said they would stop flying the Boeing 787 following a number of safety scares.

ANA was forced into an emergency landing on Wednesday, which came just days after news of fuel leaks and a fire on other planes.

The grounding in Japan was followed by a similar move in the United States Wednesday and on Thursday in India and Chile.

Dreamliner suppliers also took a hit, with battery maker GS Yuasa tumbling 5.60 percent to 303 yen and Toray Industries, which supplies lightweight carbon fibre materials, falling 2.74 percent to 496 yen.

Among other exporters, however, Sony was up 2.88 percent at 997 yen and Toyota Motor firmed 0.60 percent to 4,180 yen.

Sharp jumped 6.66 percent to 336 following a Nikkei report that the company is in the final stages of talks with Chinese computer maker Lenovo Group over a tie-up in TVs.