News Column

Tokyo stocks tumble on yen's advance

January 27, 2014

TOKYO (CIHAN)- Tokyo stocks retreated Monday, with the benchmark Nikkei stock index tumbling 2.1 percent as the yen' s appreciation and a poor performance of U.S. shares overnight sent investors fleeing from riskier assets on fears for the health of the global economy. Local traders here said that the dollar's drop to the 101 yen mark logged Monday morning, compared to the 103 yen level booked on Friday night, sparked a currency sell-off, particularly in emerging economies' currencies, and sent U.S. issues lower and investors here away from riskier assets. Brokers here also said that the sell-off was not wholly unexpected and the markets' return to market-driven, rather than artificial forces was not necessarily going to be a smooth one. Some analysts even went as far as to say that the selloff had been coming for a long time. "This kind of selloff has been a long time coming since much of the global equity markets' growth has come on the back of ' artificial' easy-money policy," said Tachibana Securities market analyst Kenichi Hirano . "The return to natural, market-driven forces is not going to go without a hitch or two," Hirano said. Other analysts pointed to domestic factors as contributing to the selloff Monday, such as news this morning that Japan's import bill for 2013 hit a record high on skyrocketing import prices. In addition, some market players assumed defensive positions ahead of evenings season here, which is set to swing into gear soon. Due to increased energy shipments and the weakness in the yen, imports were notably more costly, and contributed to a record annual trade deficit last year, the ministry of finance said in a report on Monday. According to the ministry, the deficit stood at 11.47 trillion yen ( 113 billion U.S. dollars ) -- double the number for the previous year, which logged in at just 6.9 trillion yen , the figures showed -- and logging a third straight year of deficit, the ministry said Monday. Imports, the ministry's figures showed, rose 24.7 percent in December from a year earlier, compared to analysts' predications for a 26.1 percent, while exports increased 15.3 percent, with the deficit for the recording period standing at 1.3 trillion yen (12. 7 billion dollars ), marking a record 18 straight months red ink. The rise in exports missed leading economists' forecasts for a 17.9 percent increase, but marked the 10th consecutive month of gains, but at a rate still not capable of cushioning the financial blow from the ballooning import costs the nation is having to finance. The 225-issue Nikkei Stock Average lost 385.83 points from Friday to close at 15,005.73, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange tumbled 35.37 points, or 2.80 percent, to end the day at 1,229.23. Export-related issues took a pummeling Monday on the yen's appreciation, as exporters rely on a weaker yen to boost their competitiveness and profits made overseas when repatriated. Sony , subsequently, dropped 3.0 percent to 1,711 yen , while Panasonic fell 3.3 percent to 1,188 yen . Toyota Motor , the world' s largest carmaker, skidded down 2.1 percent to 6,039 yen . Nissan Motor , for its part, also closed in negative territory Monday, losing 2.6 percent to finish at 908 yen . Other bellwether firms also lost ground Monday, with construction machinery maker Komatsu Inc. , falling 3.9 percent to 2,027 yen , while Fast Retailing Co. , operator of the Uniqlo apparel stores and the heaviest-weighted stock on the Nikkei 225, relinquished 1.6 percent to close at 37,600 yen . Fast Retailing , according to sources familiar with the matter, said Monday it plans to make its overseas debut on the Hong Kong stock exchange in March. Insurance-related issues also found minimal traction on the first trading day of the week, with Dai-ichi Life Insurance plunging 5.6 percent to 1,558 yen , while T&D Holdings fell 7.1 percent to close at 1,298 yen . Trading volume on Monday rose to to 3.26 billion shares on the Tokyo Exchange's First Section, up from Friday's volume of 3.17 billion shares, with declining issues outpacing advancing ones by 1,744 to 29. (Cihan/Xinhua) CIHAN

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Source: Cihan News Agency (Turkey)

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