Tokyo stocks fell February 27 morning as yen strength discouraged investors already cautious ahead of US President Donald Trump’s policy speech to Congress this week. / AFP PHOTO /
TOKYO, Japan (AFP) — Tokyo stocks fell Monday morning as a stronger yen discouraged investors already cautious ahead of United States President Donald Trump’s policy speech to Congress.
Markets are keen to see details of Trump’s spending plans as well as proposals for tax reform, with uncertainty over their timing and size of his plans weighing on the greenback in recent weeks.
Trump will address a joint session of Congress on Tuesday.
“We are not sure what Trump’s policies are going to be and whether he’s going to implement them at all,” Kumar Palghat, a portfolio manager at Kapstream Capital, told Bloomberg TV.
Treasury Secretary Steven Mnuchin has told US media that Trump will propose a budget designed to bring long-term growth by cutting taxes.
But that still left some investors doubting whether Trump — who has promised a “phenomenal” tax plan — can deliver what the market wants.
“Investors are now worried Trump’s ‘phenomenal’ tax plan won’t be something that beats market expectations,” Shinichi Yamamoto, a senior strategist at Okasan Securities, told Bloomberg News.
“Sentiment is jittery over the odds of Trump’s fiscal budget falling short of what’s hoped for,” he said.
The benchmark Nikkei 225 index dropped 1.16 percent, or 223.35 points, to 19,060.19 by the break, while the Topix index of all first-section issues was down 1.17 percent, or 18.12 points, at 1,532.02.
The greenback bought 112.14 yen, little changed from 112.13 yen seen in New York on Friday and down from levels seen a week ago.
A stronger yen hurts the profitability of major exporters and tends to hit demand for their shares.
Also in focus this week is revised fourth-quarter US growth data, the Federal Reserve’s regional economies Beige Book report, and a string of Japanese data, including factory output and inflation.
Toyota fell 0.78 percent to 6,398 yen, banking giant Mitsubishi UFJ Financial Group dropped 2.31 percent to 740.9 yen, while troubled Toshiba tumbled 3.17 percent to 216.8 yen.
Sony shed 0.98 percent to 3,452 yen, despite the firm saying it has sold about 915,000 units of its PlayStation virtual reality system as of this month, on track to meet a one million unit sales goal by April.