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Nikkei ends at 4-month low as yen's rise hurts exporters

TOKYO (Kyodo) -- The Nikkei stock index ended at a four-month low Tuesday, quickly giving up earlier gains as the yen's advance against the U.S. dollar hurt export-related issues.

    The 225-issue Nikkei Stock Average ended down 137.94 points, or 0.65 percent, from Friday at 21,244.68, its lowest close since Oct. 13. Japanese financial markets were closed Monday for a national holiday. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 15.19 points, or 0.88 percent, lower at 1,716.78.

    Decliners were led by rubber product, transportation equipment and marine transportation issues.

    The Nikkei index rose as much as 300 points in the morning after U.S. shares extended their rebound overnight following steep losses last week. In addition, reports over the weekend that Bank of Japan Governor Haruhiko Kuroda will be reappointed led investors to believe that the central bank would continue with monetary easing, analysts said.

    The reports "served as a cue for stock buying," said Shingo Ide, chief equity strategist at the NLI Research Institute.

    The 73-year-old Kuroda, expected to remain at the helm until 2023, has set a target of 2 percent inflation and carried out a series of bold monetary easing steps such as increased purchases of government bonds and risky financial assets.

    But stock gains were quickly trimmed later in the day in tandem with the yen's appreciation against the dollar. Exporters such as Toyota Motor widened losses as a strong yen cuts domestic companies' overseas profits when repatriated.

    "After seeing the yen's appreciation, overseas investors sold shares to secure profits," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co.

    Stock markets were also weighed down by expectations that the U.S. consumer price index for January, due out Wednesday, could be stronger than previously thought, pushing up inflation and bond yields, Ichikawa said.

    On the First Section, declining issues outnumbered advancers 1,366 to 629, while 70 ended the day unchanged.

    Among exporters, Toyota dropped 189 yen, or 2.5 percent, to 7,276 yen and Honda Motor fell 65 yen, or 1.7 percent, to 3,730 yen.

    Electronics manufacturers also drifted lower, with Sony down 75 yen, or 1.4 percent, at 5,099 yen and Fujitsu losing 6.50 yen, or 1.0 percent, to 639.20 yen.

    Bucking the downward trend, Kyushu Railway rose 25 yen, or 0.8 percent, to 3,300 yen after the company revised up its net profit estimate for the year through March 2018.

    Trading volume on the main section fell to 1,962.39 million shares from Friday's 2,137.48 million shares.


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