The pound was sitting at three-decade lows June 27 morning as currency markets were left reeling from Britain’s shock decision to leave the European Union. / AFP PHOTO /
TOKYO, Japan (AFP) — Tokyo’s benchmark stock index headed for its first loss Tuesday after six straight gains, with exporters hit by a stronger yen.
Since diving almost eight percent on June 24 in reaction to Britain’s decision to leave the European Union, the Nikkei 225 has rallied on hopes the Bank of Japan will boost its stimulus programme.
“Japanese shares declining after a series of gains isn’t strange,” Takuya Takahashi, a Tokyo-based senior strategist at Daiwa Securities Group, told Bloomberg News.
“Oil prices have taken a breather, and related shares are falling.”
At the break, the Nikkei 225 was down 0.87 percent, or 137.28 points, at 15,638.52 while the broader Topix index of all first-section shares dropped 0.69 percent, or 8.73 points, to 1,253.24.
The stronger yen hit the outlook for exporters’ profitability. The dollar slipped to 102.06 yen from 102.51 yen in London and 102.65 yen Monday in Tokyo.
Oil-linked stocks declined as crude prices eased on news of an uptick in Nigerian output. Energy explorer Inpex shed 2.20 percent to end the morning at 777.3 yen while refiner JX Holdings was down 0.87 percent at 394.9 yen.
Bank shares took a hit after struggling Italian lenders took a hammering on Monday as the European Central Bank demanded action over the high level of bad loans at the country’s number-three lender.
Japanese banking giant Mitsubishi UFJ Financial Group dropped 1.64 percent to 447.8 yen and rival Sumitomo Mitsui Financial Group fell 1.79 percent to 2,877 yen.
“There is probably some selling of banks’ shares that’s related to the Italian banks’ public cash injection issues,” said Daiwa’s Takahashi.
Automakers also dropped, with Toyota edging down 0.11 percent to 5,121 yen and Honda Motor off 1.45 percent at 2,574 yen.
Uniqlo-operator Fast Retailing, a market heavyweight, tumbled 3.73 percent to 26,670 yen, while industrial robot maker Fanuc slipped 1.56 percent to 16,085 yen.
Japanese investors missed the usual guidance from Wall Street, which was closed on Monday for the Independence Day holiday.
Traders are awaiting the release on Wednesday of minutes from the Federal Reserve’s most recent policy meeting for possible clues to its interest rate plans, while US jobs data for June is set for release on Friday.
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