Tokyo stocks close flat

June 06, 2014 - 9:58:39 am

TOKYO: Tokyo stocks closed flat on Friday with investors unmoved by the European Central Bank's launch of unprecedented easing measures to ward off deflation in the eurozone.

The benchmark Nikkei 225 index edged down 2.13 points to 15,077.24. The Topix index of all first-section shares inched up 0.15 percent, or 1.82 points, to 1,234.57.

Investors retreated to the sidelines as caution grew ahead of May's closely watched US jobs report later Friday.

Tokyo's lacklustre performance -- after four days of gains -- came despite the Dow and S&P 500 powering to record highs in response to the ECB's decision to slash interest rates.

The bank put its deposit rate into negative territory for the first time -- meaning lenders will be charged for leaving funds at the ECB in the hope they might lend it on to businesses and consumers instead.

The central bank also cut its two other key rates.

"The ECB's move took nobody by surprise; alternatively the 1,000-point Nikkei rally over the last three weeks looks vulnerable as volume is mediocre at best, with no major catalysts in sight," said Naoki Fujiwara, fund manager at Shinkin Asset Management.

"While there has been some divergence between dollar/yen and the Nikkei's movements of late, the market remains fundamentally currency-driven; the yen needs to fall for stocks to go up."

In forex trading, the greenback weakened to 102.34 yen from 102.41 yen in New York. A stronger yen hurts the profitability of Japanese exporters and tends to weigh on their shares.

Sony was down 0.78 percent to finish at 1,643 yen, while Toyota rose 0.54 percent to 5,869 yen. SoftBank fell 1.56 percent to 7,695 yen.

Sharp rose 1.97 percent to 310 yen after announcing it is starting a new product line featuring a device that gauges the wearer's health status. (AFP)

comments powered by Disqus