TOKYO: Tokyo shares slipped Wednesday morning, driven down by high oil prices as well as a surging yen despite global rallies on news that peace talks over Ukraine are making progress.
The benchmark Nikkei 225 index gave up 1.27 percent, or 358.50 points, to 27,893.92 by the lunch break, while the broader Topix index fell 1.55 percent, or 30.80 points, to 1,960.86.
The dollar stood at 122.85 yen, compared with 122.77 on Tuesday in New York and sharply lower from 123.59 yen in Tokyo the same day.
Japan’s market was seen to be on solid ground, analysts said, thanks to the improving risk appetite of global investors, which lifted US and European shares overnight.
However, the Nikkei faced technical pressure after closing with gains on Tuesday – the final day to lock in rights for dividend payouts.
“The market saw broad selling of a variety of shares, particularly high-dividend stocks” on Wednesday, Okasan Online Securities said.
“Investors then became wary about the yen’s appreciation as well as rising oil prices,” prompting further falls, it said, as analysts also warned of fears the market could overheat after recent gains.
Of the 2,175 companies listed on the Tokyo Stock Exchange, 1,656 shares dropped, led by stocks related to maritime transport, steel and fossil fuels.
Still, hopes for a Russia-Ukraine ceasefire provided general support for the global market.
“As US shares are on the rebound path, Tokyo shares should also see investors buying back,” Okasan said.
Among Tokyo shares, energy developer INPEX fell 3.38 percent to 1,459 yen, and Nippon Steel plunged 6.11 percent to 2,137.5 yen.
Leading shipping firm Nippon Yusen Kabushiki Kaisha dropped 11.25 percent to 9,860 yen, and Toyota gave up 1.55 percent to 2,226 yen.
Uniqlo operator Fast Retailing started the day in the positive region but was trading down 0.76 percent at 62,620 yen.
Sony Group also gave up earlier gains and fell 0.77 percent to 12,850 yen and Toyota gave up 1.55 percent to 2,226 yen.
Meanwhile, tech investor SoftBank Group firmed 0.89 percent to 5,553 yen.
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