By Brad Frischkorn
TOKYO--Tokyo stocks slid to a fresh two-and-a-half month low
Thursday as investors reacted to a sharply weaker dollar and a Wall
Street selloff after the U.S. Federal Reserve's move to further
scale back its bond-buying program.
The negative overall mood cast a pall on the market just as the
quarterly earnings season gets into full swing, leading to sharp
price declines for major companies announcing business results.
Read Asia Markets live blog recap for Thursday's session
Among major market movers, Canon lost 1.8% despite posting a net
profit increase Wednesday of 5% for the October-December quarter.
Kyocera lost 4.4% after revising down its full-year estimates as a
result of the slowdown in smartphone-related orders.
Sumitomo Mitsui Financial Group dropped 5.3% despite posting a
record nine-month consolidated net profit, and while Shinsei Bank
fell 8.1% after it cut its full-year consolidated net profit
view.
A sharp selloff in the dollar hurt currency-sensitive exporters,
such as industrial robot maker Fanuc, which lost 3.7%, and auto
parts manufacturer Denso , which shed 4.1%.
The greenback was changing hands at around Y102.47 at the close
of TSE trading at 0600 GMT, well down from above Y103 at the same
time Wednesday. A weaker dollar makes it harder for exporters to
cut the prices of goods they sell overseas.
The Nikkei Stock Average fell 2.5% to 15,007.06, largely erasing
the prior session's 2.7% gain. Intraday, the index fell to its
lowest level since Nov. 14.
"The Wednesday market rise was overdone, and the turmoil in
emerging markets doesn't look like it is close to dying down," said
Yoshihiro Okumura, general manager at Chibagin Asset
Management.
He added that while the continuation of the Fed's tapering
program naturally implies higher U.S. interest rates, a stronger
dollar and a weaker yen -- all of which are fundamentally positive
for Japan stocks -- the "risk-off" investor mood and jolt to the
world's growth markets is trumping all other effects.
The Fed decided to continue tapering its bond-buying program by
$10 billion, in line with expectations.
Shares garnering special individual interest Thursday included
Nintendo , which rose early on the back of its Y125 billion buyback
plan announced Wednesday. But Thursday's business strategy
conference with analysts was criticized for lacking substance,
leading to a 4.3% loss on the day.
News that China's Lenovo Group aims to acquire both Motorola's
cellphone handset business and IBM's (IBM) low-end server business
was negative for several of Apple's iPhone parts suppliers in
Japan. Shares of Ibiden lost 3.2%, while Taiyo Yuden fell 3.9% and
Rohm slipped 4.4%.
March Nikkei 225 futures closed down 2.5% to 14,990 on the Osaka
Securities Exchange.
Write to Brad Frischkorn at bradford.frischkorn@wsj.com
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