Tokyo shares down by break on growth worries, stronger yen


TOKYO: Tokyo shares slipped on Thursday morning as worries about the pace of growth of Japan’s economy hurt sentiment, while Toshiba surged following an agreement for its US unit to build nuclear reactors in India.

On Thursday, a stronger yen weighed on sentiment as investors focused on policy meetings by the Federal Reserve and Bank of Japan next week.

By the lunch break, Tokyo’s benchmark Nikkei 225 index lost 0.91 percent, or 153.08 points, to 16,677.84, following two straight days of gains.

The broader Topix index of all first-section shares fell 0.92 percent, or 12.44 points, to 1,338.53.

The world’s number three economy expanded 0.5 percent in the first quarter, revised data Wednesday showed — marginally up from a preliminary 0.4 percent reading.

The figures came a week after Prime Minister Shinzo Abe said he would delay a sales tax hike that threatened to derail the country’s fragile recovery.

Japan’s conservative leader is expected to announce a spending package within several months that could reach 10 trillion yen ($93 billion), according to earlier news reports.

But Yuki Masujima, a Tokyo-based economist at Bloomberg Intelligence, warned in a commentary that Japan’s economy would probably lose momentum without fiscal support.

“Japan’s growth prospects have received an artificial boost, thanks to the postponement of a sales-tax increase and the prospect of a supplementary budget,” Masujima said.

“Japan needs action on reform to sustain growth, regardless of when the tax hike is implemented.”

In forex markets, the dollar dropped to 106.59 yen from 106.99 yen Wednesday in New York.

A stronger Japanese currency is bad for Japanese stocks as it shrinks the value of exporters’ repatriated profits.

In share trading, Toyota slumped 1.03 percent to 5,622 yen and Nissan tanked 2.41 percent to 1,052 yen.

Other exporters were also down, with China-reliant industrial robot maker Fanuc losing 0.41 percent to 16,925 yen.

Toshiba soared 5.02 percent to 292.4 yen following an agreement for its US nuclear unit Westinghouse to construct six nuclear reactors in India. AFP



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