TOKYO: Tokyo stocks ended lower Thursday, hit by a stronger yen and concerns about the outlook for the global economy under as Donald Trump settles into the White House.
The day began on a positive note but equities soon retreated as the yen advanced against the dollar following a tepid statement from the Federal Reserve on monetary policy.
The benchmark Nikkei 225 index dipped 1.22 percent, or 233.50 points, to 18,914.58 at the close. The broader Topix index of all first-section issues fell 1.14 percent, or 17.36 points, to 1,510.41.
Traders shifted out of the dollar despite US data showing strong increases in private-sector hiring and manufacturing sector activity in January.
US Fed policymakers noted healthy economic growth, job gains and improving business and consumer confidence, but gave little away about their monetary policy plans.
The bank said it still expects to raise rates gradually, though analysts said the timing is a subject of debate.
While it was not expected to make any big announcements — having hiked interest rates last month — the lack of any solid guidance disappointed.
In Asian trade the dollar dipped to 112.54 yen from 113.27 yen in New York.
A stronger yen is a negative for Japanese exporters because it makes their products less competitive abroad and shrinks repatriated profits.
A sense of uncertainty was also weighing on sentiment as investors try to gauge Trump’s presidency, which has started on a divisive note and fuelled worries he will press on with a unilateralist agenda.
That is a far cry from the two-month rally on world markets after his election win as traders bet he would embark on a pro-growth, big-spending drive.
“The Trump administration’s protectionist rhetoric and divisive political approach have raised concerns the anticipated fiscal stimulus measures could be derailed,” said Elias Haddad, Sydney-based senior currency strategist at Commonwealth Bank of Australia.
“The dollar will continue to trade on the defensive in the near term,” he told Bloomberg News.
Some investors refrained from making major moves ahead of key US jobs data on Friday.
Toshiba fell 1.43 percent to 240.8 yen on lingering concerns over its nuclear business.
Toyota lost 1.77 percent to 6,430 yen while Sony dropped 1.20 percent to 3,369 yen. After the market close, Sony said its nine-month net profit to December fell 80.7 percent and downgraded its full-year forecast.
Fast Retailing, operator of fashion chain Uniqlo, dropped 2.17 percent to 35,140, while mobile operator SoftBank fell 1.35 percent to 8,686 yen.
Nippon Steel & Sumitomo Metal sank 2.34 percent to 2,729 yen. After the market close the steelmaker said its nine-month net profit dropped 61.2 percent but it upgraded its forecast for the full-year to March.
