Tokyo stocks edge down as yen gains

Tokyo, Aug 22: The Nikkei average edged down 0.5 per cent on Wednesday, with exporters such as Toyota Motor Corp.

falling, as investors were cautious over a stronger yen and ahead of the Bank of Japan's monetary policy decision.

Bank shares were also sold with Resona Holdings Inc. dropping 4.2 per cent to 226,000 yen, dragging down the broader TOPIX index.

''The market is taking a break today, as investors are getting nervous about the stronger yen,'' said Zenshiro Mizuno, senior managing director at Marusan Securities.

The yen held gains against the dollar and euro on Wednesday as investors kept shedding risky positions after a slide in U.S.

stocks worked as a reminder that confidence in the credit market has yet to be restored.

Mizuno said while the Nikkei average is unlikely to fall steeply from current levels, the upside is also limited as investors are unwilling to jump in and snatch stocks ahead of a series of key events.

''Investors are waiting to confirm the outcome of the BOJ policy meeting and to see the next week's cabinet reshuffle by Prime Minister Abe,'' he said.

The BOJ starts a two-day policy meeting on Wednesday at which it is widely expected to keep interest rates unchanged.

The Nikkei fell 70.9 points to 15,830.44 as of 0105 GMT.

The broader TOPIX index shed 0.71 per cent to 1,538.90.

Trading houses and steelmakers, which led the rebound earlier this week, fell with Marubeni Corp. shedding 2.9 per cent to 891 yen and JFE Holdings Inc. losing 2.6 per cent to 7,110 yen.

Reuters>