TOKYO: Tokyo stocks fell 0.53 percent on Thursday after debt-ridden Spain's disappointing bond auction sparked new worries over the eurozone, pushing the safe-haven yen higher.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange lost 52.38 points to close at 9,767.61 while the Topix index of all first-section issues lost 0.33 percent, or 2.79 points, to 832.57.
"Worries over the eurozone resurfaced overnight," said Tachibana Securities operating officer Kenichi Hirano.
"However, capital liquidity remains ample in the market, which supports stocks' performance, as tightened policy measures are unlikely," he told Dow Jones Newswires.
On Wednesday, the lacklustre Spanish auction and the reluctance of the US Federal Reserve to launch a fresh round of stimulus measures sent the Dow Jones Industrial Average down 0.95 percent to 13,074.75 in New York.
Spain raised nearly 2.6 billion euros ($3.4 billion) at the sale but was forced to pay higher rates amid fresh concerns over its strained public finances despite a tough austerity budget.
Also Wednesday a study showed eurozone private sector activity weakened last month, adding to evidence that the region is in recession, while the US Federal Reserve indicated it would not provide any new stimulus to the world's biggest economy in the near term.
Tokyo shares fell largely on Wall Street's drop and the rising yen, which makes domestic firms' exports more expensive and erodes the value of foreign profits, said Marusan Securities general manager of investment information Takashi Ushio.
But he added "euro selling on the poor Spanish bond auction will likely last for a short while and isn't that negative."
The euro bought $1.3148 and 108.13 yen in Tokyo in Thursday afternoon, compared with $1.3141 and 108.35 yen in New York late Wednesday. The dollar was down to 82.22 yen from 82.46 yen.
Ushio said financial shares were tracking their US peers' weak performance Wednesday on eurozone concerns and ahead of the close of European and US markets Friday for the Easter holiday.
Banking heavyweight Mitsubishi UFJ Financial fell 1.21 percent to 406 yen with Mizuho Financial Group down 0.76 percent at 129 yen.
Major exporters also dropped, with Toyota Motor down 0.71 percent at 3,460 yen and Nikon down 1.86 percent to 2,425 yen.