Japanese stocks fell on Monday, with exporters hit by a strong yen despite attempts by officials to talk the currency down. Concerns about the global economy and the likelihood that US interest rates will not rise until at least June have sent investors running to the Japanese unit, which is considered a safe bet in times of turmoil. On Monday the dollar slipped below 108 yen and was around levels last seen in October 2014, just before the Bank of Japan ramped up its vast bond-buying stimulus that effectively prints cash.
The yen's surge has put downward pressure on Japan's export giants such as Toyota and Honda since it reduces the value of overseas profits. The benchmark Nikkei 225 lost 0.44 percent, or 70.39 points, to end at 15,751.13. The broader Topix index of all first-section shares fell 0.61 percent, or 7.90 points, to 1,279.79. The yen's advance has led Japanese officials to attempt to talk it down, with top government spokesman Yoshihide Suga telling reporters Monday that Tokyo would take action if the currency keeps strengthening.
"The government is closely watching with vigilance, and is ready to take necessary measures depending on situations," he said, calling the movements "one-sided" and "speculative". His comments were similar to those made Friday, when Finance Minister Taro Aso described rapid moves in the unit as undesirable. Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News: "We're prone to being swung by the dollar-yen this week.
"Unless we see the weakening dollar flow caused by declining US rate hike expectations stop, we're in a tough situation. Speculators' yen-buying positions have piled up, and considering past scenarios, it won't be surprising to see more yen-buying." Marito Ueda, senior dealer at FX Prime, told AFP the market trend had changed to buying back the yen. "Players are turning pessimistic as the stock market is weak and the yen's strengthening will likely continue for a while," he said.
Toyota Motor fell 3.45 percent to 5,278 yen, while Honda was down 2.08 percent at 2,822.5. Fast Retailing gained 0.77 percent to 26,815 yen following Friday's near 13 percent drop after it posted a sharp decline in half-year profit and warned its annual earnings would plummet. Ahead of the opening bell, data showed core machinery orders shrank 9.2 percent in February from the previous month, the first drop in three months.