Tokyo stocks close down 0.56pc

July 10, 2014 - 10:46:08 am

TOKYO: Tokyo stocks lost 0.56 percent Thursday despite a pick-up on Wall Street as exporters were hit by a stronger yen while the US Federal Reserve signalled its intention to end its long-running stimulus later this year.

The Nikkei 225 index ended down 86.18 points to finish at 15,216.47 while the Topix index of all first-section issues was down 0.91 percent, or 11.57 points, to 1,259.25.

Minutes released Wednesday of June's Fed policy meeting showed the bank was upbeat about the US economy and plans to end its five-year-long, economy-boosting bond-buying scheme in October.

On Wall Street the Dow gained 0.47 percent, snapping a two-day slide, with a solid earnings report from Alcoa also providing support.

"The Fed looks like it's leaning toward ending its asset purchases in October, and that's about what everyone had expected," said Yoshihiro Okumura, general manager of Chibagin Asset Management.

"As corporations are now in their usual 'quiet period' before earnings announcements, investors are in 'wait-and-see' mode as trading incentives are few," he added.

Major Japanese companies are set to announce earnings in late July.

"The weaker dollar, the unsurprising (Fed) June minutes, and the lack of appetite from big domestic buyers are all combining to push the market lower," an equity trading director at a European brokerage told Dow Jones Newswires.

"A resilient Wall Street is keeping sentiment from tanking, but otherwise there just aren't many reasons to bid stocks up."

In Tokyo fresh government data showed core machinery orders, excluding volatile orders for ships and from electric power companies, dropped sharply for the second straight month in May.

Orders fell 19.5 percent from April, a record, suggesting firms were pulling back on fresh capital spending, but the gloom was partially offset by a jump in consumer confidence as concerns about a recent sales tax hike appeared to be fading.

In currency markets, the dollar was at 101.49 yen, down from 101.64 yen in New York.

The stronger currency pushed some major exporters down with Toyota falling 0.97 percent to 6,003 yen and Canon 1.36 percent lower at 3,261 yen. (AFP)

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