Tokyo stocks close down 0.59pc

January 07, 2014 - 9:22:51 am

TOKYO: Tokyo shares closed down 0.59 percent Tuesday, extending the previous day's heavy fall, and following losses on Wall Street.

The benchmark Nikkei-225 index shed 94.51 points to 15,814.37, after tumbling 2.35 percent Monday, while the Topix index of all first-section shares fell 0.69 percent, or 8.90 points, to 1,283.25.

Investors tracked a weak lead from New York where the three main indexes sank following data that showed slowing growth in the US service sector last month and despite news that November new factory orders hit their highest level in more than 20 years.

The Dow fell 0.27 percent, the S&P 500 declined 0.25 percent and the Nasdaq lost 0.44 percent.

Analysts said the Nikkei's sluggish start to 2014 was little surprise after it surged 57 percent last year -- its best performance since 1972.

A pick-up in the dollar against the yen helped push the Japanese market briefly into positive territory Tuesday, but it quickly slumped back into the red as investors booked profits.

The greenback bought 104.50 yen against 104.19 yen in New York on Monday but remains well below the five-year high of 105.41 yen seen last week.

"The market is looking for guidance in the absence of a definitive dollar direction, and may have to wait for corporate earnings guidance in late January and February to find it," Daisuke Uno, strategist at Sumitomo Mitsui Banking Corp., told Dow Jones Newswires.

"A slew of upwards revisions by key companies would provide a good fundamental driver to the stock market," he added.

A weaker yen tends to boost shares of Japanese exporters because it makes them more competitive overseas and inflates the value of repatriated earnings.

Sony shares slipped 0.11 percent to 1,800 yen, Toyota was off 0.47 percent at 6,270 yen, Nippon Steel & Sumitomo Metal was down 0.57 percent at 347 yen and Japan's biggest bank Mitsubushi UFJ fell 1.31 percent to 677 yen.

Nissan edged down 0.22 percent to 896 yen with Japan's number-two automaker saying after markets closed that sales to China last year surged 17.2 percent to a record 1.26 million units.

Rivals Toyota and Honda said Monday they also posted record 2013 sales to China, the world's biggest vehicle market, marking a comeback from a year earlier when a dispute over islands in the East China Sea flared anew and sent relations between Tokyo and Beijing plummeting.

The diplomatic row sparked riots across China and a boycott of Japanese brands.  (AFP)