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Nikkei drops as exporters sold on stronger yen

Written by: Staff
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TOKYO, Nov 24 (Reuters) The Nikkei average dropped 1.3 percent on Friday, with shares of exporters such as Honda Motor Co. Ltd. and Kyocera Corp. declining after the yen hit its highest in more than two months against the dollar.

Shares of Sumitomo Mitsui Financial Group Inc. (SMFG) dropped more than 4 percent after Japan's third-largest bank reported a steeper-than-expected 38 percent fall in half-year net profit.

''The currency movement is one of the factors behind the selling that we're seeing this morning,'' said Renji Motohashi, general manager at the equity department of Shinko Securities.

''I think the focus is on whether or not the Nikkei will be able to stay above 15,700.... If we see much more of a decline it won't be the case of profit-taking, but investors selling to get out.'' The Nikkei was down 203.84 points at 15,710.39 as of 0109 GMT. The broader TOPIX index was down 1.22 percent at 1,533.90.

Japanese markets had been closed on Thursday, in observance of the Labour Thanksgiving Holiday.

Honda fell 2 percent to 4,030 yen, hit by concerns the stronger yen will eat into its profits from overseas.

Honda makes some 83 percent of its sales outside of Japan.

The yen was at 116.30 to the dollar, after rising as high 116.03 a day earlier, the highest since early September.

Electronic components maker Kyocera dropped 1.3 percent to 10,250 yen.

Shares of lender SMFG dropped 4.2 percent to 1.14 million after the lender posted a lower half-year profit, hurt by a lending slowdown and losses on its bond portfolio.

Reuters SBA VP0722

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