Stocks close 1.44% lower

TOKYO

Tokyo stocks closed 1.44% lower Monday, dampened by the dollar’s fall against the yen on a weaker-than-expected reading for U.S. jobs growth.

The benchmark Nikkei 225 index lost 208.12 points to 14,258.04, while the Topix index of all first-section shares lost 0.96%, or 11.43 points, to 1,184.74.

The slip came as the dollar weakened against the yen in forex markets after a U.S. jobs report for July, released after Tokyo markets closed Friday, came in lower than expected.

The dollar fetched 98.40 yen in late afternoon trade, down from 98.89 yen in New York Friday afternoon and 99.50 yen in Tokyo.

A stronger yen tends to weigh on shares of Japanese exporters as it makes their products less competitive abroad while reducing the value of repatriated overseas income.

Market watchers said the downside for Tokyo stocks appeared limited as expectations remained intact for an earnings recovery at Japanese companies, particularly after Toyota posted the surprisingly strong first-quarter results Friday.

“Many Japanese earnings results have been weaker than expected, but many posted significant profit increases nonetheless,” Yutaka Shiraki, senior equity strategist at Mitsubishi UFJ Morgan Stanley Securities, told Dow Jones Newswires.

Hiromichi Tamura, chief strategist at Nomura Securities, added that “stocks may lack a clear direction, but there are no reasons for sharper falls”.

“Because we’ve seen relatively weak results for the first quarter at the beginning of the season, market participants were a bit worried, but such concerns are ebbing after we saw Toyota’s results,” Tamura added.

Japan Today