Tokyo stocks close 0.62pc lower

December 11, 2013 - 10:20:02 am

TOKYO: Tokyo stocks closed 0.62 percent lower Wednesday, with exporters hit by a stronger yen and despite a Washington budget deal that aims to avoid a repeat of October's paralysing government shutdown.

The benchmark Nikkei 225 index fell 96.25 points to 15,515.06, while the Topix index of all first-section shares slipped 0.47 percent, or 5.88 points, to 1,250.45.

Under a deal reached in October that ended a crippling 16-day shutdown, federal spending authority expires on January 15, when a new deal will need to be in force.

The two-year agreement reached on Tuesday sets the warring Democratic and Republican Parties on track for further cooperation on fiscal policy, ending the cycle of budget feuding that has marred Washington since 2011.

The challenge now is selling the agreement to sceptical conservatives and liberals in the Senate and House of Representatives.

The deal may boost expectations that the Federal Reserve will decide to start scaling back its monetary easing programme at its policy meeting next week, dealers said.

"Since the agreement may raise speculation that obstacles for the Fed to start winding down its bond-purchase programme are removed, how US financial markets later in the global day will fare will be closely focused," Mizuho Securities said.

Investors will be monitoring US November retail sales later Thursday for more clues about the state of the economy.

The central bank has said it will start drawing down on the scheme once the world's biggest economy is on a firm footing.

In currency trade the dollar bought 102.72 yen, down from 103.30 yen in Asia Tuesday.

Honda shares slipped 0.82 percent to 4,215 yen and electronics giant Kyocera was down 1.50 percent at 5,220 yen.

Sharp edged up 0.29 percent to 341 yen after it agreed with Hewlett-Packard to manufacture advanced copiers under the US firm's brand.

Yahoo Japan jumped 4.65 percent to 585 yen after JPMorgan initiated its rating for the company with high-notch "overweight" and a 600 yen per share target price. (AFP)


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