Tokyo stocks close 2.59pc lower

March 12, 2014 - 9:15:00 am

TOKYO: Tokyo stocks fell 2.59 percent Wednesday as the yen strengthened while another fall in consumer confidence raised fresh fears about Japan's economic recovery ahead of next month's sales tax rise.

The benchmark Nikkei-225 index fell 393.72 points to finish at 14,830.39, while the Topix index of all first-section shares slipped 2.13 percent, or 26.27 points, to 1,206.94.

"The lack of participants is showing what happens when there is also a lack of trading cues or negative factors -- volatility kicks up," said Sumitomo Mitsui Banking Corp. strategist Daisuke Uno.

"The market is up one day, down the next... there is no direction," he added.

Exporters were hit as the dollar weakened, falling to 102.85 yen in Tokyo, from 102.94 yen in New York, and well below the 103.30 yen seen earlier Tuesday.

"There is nothing to trade on, and so the market is choppy. This is likely to continue until at least the next US (Federal Reserve policy meeting on March 18-19)," a trading director at a foreign brokerage told Dow Jones Newswires.

Dealers, however, said concerns about the simmering crisis in Ukraine and weak Chinese data had hurt buying sentiment.

Also Wednesday, a government survey of Japanese household confidence fell 2.2 points to 38.3 in February from the previous month, a third straight loss. A reading below 50 indicates pessimists outnumber optimists.

The figure comes as Japan prepares to hike sales tax next month to eight percent from five percent to help tackle its huge debts, but critics have warned it will crimp spending and throw a tentative economy recovery off track.

Financial shares sank, with insurer Dai-ichi Life down 2.12 percent at 1,522 yen while brokerage giant Nomura Holdings fell 2.84 percent to 683 yen.

Among exporters Honda shed 1.95 percent to 3,765 yen and Sony finished down 1.44 percent at 1,840 yen.

US stocks Tuesday finished lower for a second straight day as profit-takers cashed in after last week's records.

The Dow slipped 0.41 percent, the S&P 500 shed 0.51 percent and the Nasdaq lost 0.63 percent, its fourth loss in as many sessions. (AFP)