• Tokyo stocks fall by break as strong yen hits exporters

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    TOKYO: Tokyo stocks dived Monday morning as the yen surged on weak US jobs data that aggravated worries about the global economy and all but ruled out a US rate hike this month.

    The smallest monthly job creation tally in nearly six years came after Federal Reserve officials had repeatedly said a June or July interest rate increase was on the cards.

    But the world’s top economy added only 38,000 net new positions in May, a quarter of the amount expected, the data on Friday showed.

    The Fed holds a policy meeting next week.

    “The market had been taking an optimistic view that even if we see a US rate hike in the coming few weeks, the economy was brisk enough to withstand it,” Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News.

    “But now we see that there’s a gap between the actual economy and what the market was thinking… There’s really no reason to buy Japanese stocks at the moment.”

    By the lunch break, Tokyo’s benchmark Nikkei 225 index was down 1.14 percent, or 189.28 points, at 16,452.95, while the broader Topix index of all first-section shares dropped 1.17 percent, or 15.67 points, to 1,321.56.

    The dollar ticked up to 106.81 yen from 106.63 yen Friday in New York. But it was still way down from the levels above 109 yen earlier in the day before the jobs figures.

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

    Toyota slumped 0.96 percent to 5,620 yen, Nissan was 1.90 percent off at 1,057.5 yen and industrial robot maker Fanuc slipped 1.29 percent to 15,970 yen.

    Banks also fell, with Mitsubishi Financial Group down 2.10 percent at 520 yen and rival Sumitomo Mitsui Financial Group tumbling 2.55 percent to 3,324 yen.

    Energy explorer Inpex shed 3.09 percent to 840.1 yen, while refiner JX Holdings edged 0.37 percent lower to 423 yen. AFP

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