Tokyo stocks fall as automakers dented by yen

 27 Mar 2017 - 10:27

Tokyo stocks fall as automakers dented by yen
File Photo.

AFP

Tokyo: Tokyo stocks closed lower Monday as a strong yen dented Japan's major automakers, while Toshiba dropped on a report that its troubled US nuclear unit could start bankruptcy proceedings this week.

The benchmark Nikkei 225 index fell 1.44 percent, or 276.94 points, to 18,985.59, while the Topix index of all first-section issues was down 1.26 percent, or 19.53 points, to end the day at 1,524.39.

Exporters sank as the yen strengthened against the dollar on growing doubts about US President Donald Trump's ability to carry out his economic agenda following Friday's failed healthcare deal.

The yen is seen as a safe bet in times of uncertainty or turmoil, but a stronger currency hurts the profitability of exporters -- hitting demand for their shares.

The dollar slipped to 110.27 yen from 111.12 yen in New York Friday.

"People are cutting back on their expectations for Trump," Soichiro Monji, general manager of the economic research department at Daiwa SB Investments, told Bloomberg News.

Trump's replacement for Obamacare was pulled Friday as he failed to garner enough support among Republican lawmakers, who have a majority in both houses of Congress.

"I suspect the markets will continue to view this failed vote as a litmus test for the ability of the Trump administration to drive the president's agenda going forward," said Stephen Innes, a senior trader at OANDA.

"How quickly the White House administration can pivot to and get a convincing message across on tax reform will likely be the major focus early in the week. 

"The markets are desperately seeking any glimmer of optimism that the tax reform agenda can unite Republicans," he added in a commentary.

Toshiba opened four percent higher before diving, after the leading Nikkei business newspaper said its loss-hit US unit Westinghouse could file for Chapter 11 bankruptcy as early as Tuesday in a court-protected restructuring.

The firm closed down 2.06 percent at 218.4 yen.

A Toshiba spokesman declined to comment on the report.

Tepco fell 1.88 percent to 417 yen on a report that the Fukushima plant operator will shuffle its top management. 

Toyota dropped 1.13 percent to 6,158 yen while rival Honda lost 1.45 percent to finish at 3,390 yen.

Sony fell 0.72 percent to 3,577 yen, and Canon dropped 0.97 percent to 3,461 yen.