TOKYO: Japan’s Nikkei share average dropped for a second day on Thursday, extending its retreat from a nearly three-month peak, as a stronger yen sent automaker shares sliding.
The Nikkei sank 1% to 37,755.51 as of the close, as the yen strengthened for a third day, eroding the value of Japanese exporters’ overseas revenues.
The broader Topix fell 0.9%, also a second session of losses.
The Nikkei had rallied 25% between a low on April 7 and the high on Tuesday, partly as optimism built for a spate of US trade deals that would remove the risk of a global recession.
“The run-up in the Nikkei had been very fast, and we’re still at a very high level,” said Maki Sawada, a strategist at Nomura.
“Investors are cautious that there is still a degree of overheating in the market.”
Transport equipment was the worst performer among the Tokyo Stock Exchange’s industry groupings, dropping 2.8%.
Toyota tumbled 3.4%, while Honda and Nissan each slumped 3.9%.
Overnight news that US and South Korean officials met last week to discuss the exchange rate ignited speculation that Washington may seek a weaker exchange rate for the dollar as part of trade negotiations with Asian nations.