TOKYO: Tokyo stocks opened lower on Thursday after a downturn on Wall Street, slipping off a nine-month high hit the previous day on the back of a weak yen.
The benchmark Nikkei 225 index had gained nearly 10 percent to Wednesday, surging after Donald Trump was elected US president as the dollar rose against the yen on expectations of higher fiscal spending under his government.
But the Trump rally seems to have run its course with the yen gaining on the greenback on Thursday.
“Investors will be inclined to take profits, especially on banking stocks after their US peers fell overnight following recent gains on rising inflation expectations,” said Mitsuo Shimizu, a deputy general manager at Japan Asia Securities Group Ltd.
“We’ve seen a round of buying driven by hopes over incoming US President-elect Donald Trump’s policy moves,” Shimizu told Bloomberg News.
“Now we’re in a phase where we want to see actual details.”Tokyo’s key Nikkei 225 index, which closed at its best level since early February on Wednesday, lost 0.45 percent, or 80.71 points, to 17,781.50 in the first few minutes of trading. The broader Topix index of all first-section issues was down 0.51 percent, or 7.18 points, to 1,414.47.
The dollar, meanwhile, was changing hands at 108.82 yen Thursday against 109.09 yen in New York on Wednesday afternoon. A weak yen is generally favourable for Japanese stocks as it helps the country’s exporters by making their products more competitive overseas and increasing the yen value of profits earned abroad.
In New York, the blue-chip Dow Jones Industrial Average broke a seven-day winning streak, falling 0.3 percent, and the broader S&P 500 lost 0.2 percent, as investors rotated out of Wall Street banks.
In Tokyo, e-commerce leader Rakuten fell 2.90 percent after it signed a massive shirt sponsorship deal with Spanish giants FC Barcelona.
The contract, one of world football’s most lucrative shirt sponsorships, is worth at least 55 million euros ($59 million) a year.
Mitsubishi UFJ Financial Group dropped 2.75 percent to 664 yen and Sumitomo Mitsui Financial Group lost 2.86 percent to 4,070 yen.
Toyota was down 0.19 percent to 6,174 yen and Nissan fell 0.97 percent to 1,020.5 yen.
