Tokyo stocks down at break as exporters, banks fall

TOKYO: Tokyo stocks ended Tuesday morning in negative territory as a strong yen hit exporters and banks following a three-day weekend in Japan.

After Tokyo markets closed Friday for the long weekend, the dollar fell against the yen on weaker-than-expected US inflation and retail sales data, while a manufacturing gauge also missed forecasts.

"We've had a series of not so positive US economic data," said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities.

"With the yen stronger, it's difficult to buy exporters and financial shares," he told Bloomberg News.

The Japanese unit picked up pace on Tuesday after it emerged that Donald Trump's health care reform plan was likely to fall through, throwing into doubt his economic agenda.

Tokyo's benchmark Nikkei 225 index fell 0.63 percent, or 127.00 points, to 19,991.86 by the break, while the Topix index of all first-section issues was down 0.56 percent, or 9.14 points, at 1,616.34.

The dollar weakened to 112.15 yen on Tuesday from 113.30 yen in Tokyo on Friday.

A strong yen erodes Japanese companies' repatriated profits and often drags the Tokyo stock market down.

Panasonic fell 0.68 percent to 1,516.5 yen while Toyota lost 1.24 percent to 6,180 yen.

Among major banks, Mitsubishi UFJ Financial was 2.11 percent lower at 716.3 yen and rival Sumitomo Mitsui fell 1.11 percent to 4,245 yen.

Toshiba jumped 8.29 percent to 250.8 yen after a California judge on Friday put on hold a request by Western Digital to block the sale of its Japanese partner's chip division.

San Francisco Superior Court Judge Harold Kahn gave Toshiba and Western Digital until July 28 to draft an order requiring the Japanese company to give its Silicon Valley partner two weeks' notice before closing a sale that could be worth $18 billion.

Toshiba is trying to sell its prized chip division in a bid to raise money after incurring massive losses at its US nuclear power business.

Oil refiner Idemitsu fell 3.26 percent to 2,639 yen on dilution fears as news reports said a Tokyo court rejected the founding family's bid to block a new share issue.