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Japan stocks slip on firmer yen, bank shares sold
Tokyo,
Oct
19:
Japan's
Nikkei
average
slid
below
17,000
on
Friday
as
exporters
such
as
Canon
Inc
were
hit
by
a
strong
yen,
with
selling
of
bank
shares
adding
to
overall
weakness
after
a
bad
earnings
report
from
the
No.2
U
S
bank.
Shares in beer maker Kirin Holdings Co rose 1.5 percent after the Nikkei business daily said it is in talks to take a majority stake in drug maker Kyowa Hakko Kogyo Co in a deal that could top 300 billion yen ($2.6 billion).
But the main focus of the market was foreign exchange trade as the dollar tumbled against the yen after Bank of America posted a much larger-than-expected 32 percent drop in quarterly profit on Thursday on the back of mounting credit losses, fanning concerns that a global credit squeeze is far from over.
''Tokyo stocks are really vulnerable to a rising yen, and the market is going to watch dollar/yen rates keenly ahead of the G7 meeting later today,'' said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Group of Seven finance ministers and central bank heads are meeting in Washington on Friday.
''If the dollar recovers a bit against the yen, the Nikkei may head back to the 17,000 level, but it all depends. Mainly, the market today just has to prepare to hang on and endure,'' he said.
The dollar was trading at around 115.14 yen by mid-morning in Tokyo.
Japanese bank shares were sold again after a day of recovery on Thursday, but Okamoto said the main factor was simply the general selling mood that had emerged in the market, sparked by large sell orders by foreign investors just after the start of trade.
The Nikkei was down 1.7 percent or 290.14 points at 16,815.95 as of 0054 GMT. The broader TOPIX index was down 1.6 percent or 24.99 points at 1,592.66.
Exporters Fall
Shares in exporters were generally weak, with Canon down 3 percent at 5,920 yen and Sony Corp losing 2 percent to 5,320 yen.
Auto firms were also hit, with Toyota Motor Co down 1.4 percent at 6,270 yen and Honda Motor Co slipping 1.6 percent to 3,820 yen. Among bank shares, Mizuho Financial was down 3 percent at 611,000 yen and Sumitomo Mitsui Financial Group lost 3 percent to 826,000 yen.
Reuters
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