Tokyo shares open lower as stronger Yen hits exporters

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TOKYO (AFP) – Tokyo shares slipped at the start of trading Thursday as a stronger yen hit exporters, while investors await the outcome of a Bank of Japan policy meeting.

The Japanese central bank, which starts a two-day meeting that ends Friday, is widely expected to announce a further easing in monetary policy, though analyst are wary over what action it might take.

The BoJ s meeting comes on the heals of news on Wednesday of a whopping 28 trillion yen ($266 billion) government stimulus package aimed at shoring up the world s third-largest economy.

Among the possible measures, the BoJ could expand its mammoth asset buying plan or cut interest rates further into negative territory.

“Investors are wary that the BoJ will disappoint and it ll lead to a bout of selling,” Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management, told Bloomberg News.

“The bar has already been raised too high for the BoJ s policies. Unless there s some sort of policy that crosses that line… Japanese stocks will be sold and the yen will be bought.”

In opening deals, the benchmark Nikkei 225 index lost 0.41 percent, or 68.67 points, to 16,596.15, slipping after a strong gain the previous day.

The broader Topix index of all first-section shares dropped 0.60 percent, or 7.91 points, to 1,313.76.

Japanese Prime Minister Shinzo Abe confirmed the government stimulus plan Wednesday but gave few details, except to say about half the total would be fiscal measures including government spending. Cheap loans could also be part of the package.

Japan s economy has been struggling to gain traction with a string of weak readings and sagging business confidence heaping pressure on Tokyo and the central bank to step up to the plate.

In currency markets, the dollar dived to 104.85 yen from 105.31 yen in New York and 105.78 yen in Tokyo earlier Wednesday.

In early share trading, Toyota lost 0.42 percent to 5,841 yen and Nissan was off 1.24 percent at 1,033.5 yen.

Sony, which posts financial results on Friday, dropped 1.14 percent to 3,189 yen, while Panasonic declined 1.70 percent to 998.2 yen.

Investors are also keeping tabs on Japan s latest earnings reports, with mobile giant SoftBank reporting after markets close on Thursday, while Japan Airlines also posts results later in the week.

2016-07-28

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