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Japan stocks tumble as yen surges versus dollar
By TOMOKO A. HOSAKA,Associated Press Writer -
Monday, September 28
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TOKYO – Japanese stocks reeled Monday from a soaring yen, which triggered fresh concerns about shrinking profits among exporters.
The benchmark Nikkei 225 stock average tumbled 256.46 points, or 2.5 percent, to 10,009.52 after falling under the 10,000 level briefly for the first time since July 24. The broader Topix index retreated 2.2 percent to 902.84.
Stocks fell across the board, with investors unloading exporters as the dollar fell to the lower 88-yen range for the first time since December.
The U.S. currency later recovered and was trading at 89.58 yen in the afternoon from 89.60 late Friday in New York. The dollar climbed against the euro, which stood at $1.4610 from $1.4698.
In comments to media early Monday, Finance Minister Hirohisa Fujii described recent currency movements as not abnormal and reiterated his opposition to intervention in foreign exchange markets. He sought later in the day to temper his comments, saying he was not unilaterally in favor of a strong yen.
Yuji Saito, head of foreign exchange at Societe Generale in Tokyo, said Japan does not appear to be ruling out intervention and is likely to carry out foreign exchange operations when needed. But market players were intepreting Fujii's recent comments to mean that Japan would not be adopting a "weak yen policy," he said.
Yen appreciation reduces the value of overseas profits when repatriated to Japan. Many exporters have based their earnings forecasts on the assumption that $1 buys an average of 95 yen.
Analysts also said exporters themselves are fueling the yen's rise as they repatriate profits ahead of the end of the fiscal first half.
Shares of Nissan Motor Co. dropped 5.1 percent to 580 yen, while those of Honda Motor Co. declined 5 percent to 2,675 yen. Game console maker Nintendo Co. retreated 3.8 percent to 23,110 yen.
Sanyo Electric Co. plunged 6.4 percent to 218 yen. The company on Friday warned that it would book a 30 billion yen ($336.4 million) net loss for the fiscal year ending March 2010 instead of breaking even.
Sanyo blamed the downgrade on costs related to washing machine recalls and early retirement payouts. It booked a net loss of 93.2 billion yen last year.
____
AP Business Writer Yuri Kageyama contributed to this report.
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