TOKYO, MILLAT+(APP/AFP) – Tokyo shares fell Wednesday morning after
US president-elect Donald Trump’s comment that the dollar was too strong lifted the yen — a negative for Japan’s exporters.
In Asian currency markets, the greenback was trading at 113.07 yen,
down from 113.40 yen in Tokyo on Tuesday.
The drop was in reaction to a Trump interview, published in Monday’s
Wall Street Journal, in which he described the dollar as being “too strong”.
Investors also grew cautious ahead of Trump’s Friday inauguration, as
questions swirl about his policies.
“Trump has made a lot of announcements but people are waiting for
that to translate into implementation and some policy around that,” Paul Harris, a fund manager at Avenue Investment Management, told Bloomberg TV.
“This is the time when you might have some slight volatility.”
Dealers tend to buy Japan’s currency as a safe-haven investment.
“With the yen on the rise, expectations for more upgrades in Japanese
corporate earnings estimates will be toned down,” said Shinichi Yamamoto, a
senior strategist at Okasan Securities.
A strong yen is negative for Japanese exporters as it makes their products less competitive abroad and reduces the value of their repatriated profits.
“Volatile market moves are expected ahead of Trump’s inauguration at the end of this week, with investors putting off trading activity,” Yamamoto said.
The benchmark Nikkei 225 index fell 0.20 percent, or 37.08 points, to
18,776.45 by the lunch break, while the Topix index of all first-section issues slipped 0.36 percent, or 5.43 points, to 1,503.67.
Major exporters were hit, with Toyota dropping 0.08 percent to 6,713 yen and Sony off 1.05 percent at 3,467 yen.
Bank shares also fell. Mitsubishi UFJ dropped 1.77 percent to 702.1 yen and Mizuho lost 1.29 percent to end the morning at 205.6 yen.