Tokyo stocks close 0.75pc lower

May 15, 2014 - 9:58:41 am

TOKYO: Tokyo stocks fell 0.75 percent Thursday as the stronger yen and a slump in Sony shares overshadowed data showing Japan's economy grew faster than expected in the first three months of the year.

The benchmark Nikkei 225 index slipped 107.55 points to finish at 14,298.21, while the Topix index of all first-section shares was down 0.41 percent, or 4.86 points, to 1,178.29.

Just before the market opened, Tokyo said the economy grew 1.5 percent between January and March, the fastest pace in more than two years fuelled by a rush in demand before a sales tax hike on April 1.

However, exporters sank as the yen climbed against the dollar, which makes them less competitive abroad and erodes repatriated profits.

"The yen's strength was a major factor behind today's decline," said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

"The GDP figures were quite strong, but the focus has already moved to April-June figures, which are expected to fall sharply due to the consumption tax hike."

In currency markets, the dollar fetched 101.83 yen Thursday afternoon, down from 101.87 yen late in New York and well off the 102.20 yen in Tokyo earlier Wednesday.

Sony tumbled 6.09 percent to 1,695 yen after the struggling electronics giant warned Wednesday it would remain in the red for another year after it booked a $1.26 billion annual loss.

Domestic rival Panasonic fell 0.73 percent to 1,087 yen, while Sharp gained 1.80 percent to 282 yen. Both firms have recently posted annual profits after suffering years of massive losses.

US stocks finished lower on Wednesday following mixed earnings and a surprising rise in producer prices, snapping a five-day winning streak for the Dow that included three straight record closings.

The Dow fell 0.61 percent, the S&P 500 slipped 0.47 percent and the Nasdaq lost 0.72 percent. (AFP)

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