Mon, 26 Oct 2020

TOKYO, Sept. 17 (Xinhua) -- Tokyo stocks closed lower Thursday after the U.S. Federal Reserve indicating its interest rates will remain low for a prolonged period of time sent the yen higher against the U.S. dollar which dented exporter issues.

The 225-issue Nikkei Stock Average dropped 156.16 points, or 0.67 percent, from Wednesday to close the day at 23,319.37.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 5.95 points, or 0.36 percent, to finish at 1,638.40.

The Fed indicated that it would continue to keep its interest rates at near zero until at least 2023, which saw the yen rise to a seven-week high versus the U.S. dollar.

This negatively impacted issues broadly exposed to overseas markets and reliant on a weaker yen for profitability, local brokers said.

"The Fed's prolonged easing stance made it difficult to see how the yen has any room to depreciate against the dollar," Makoto Sengoku, a market analyst at the Tokai Tokyo Research Institute, was quoted as saying.

"Concerns are growing that the yen's firm tone from now on will slow profit recovery in exporters, which had shown signs of improvement from the coronavirus pandemic," he added.

Japan's central bank meanwhile, at the conclusion of its two-day policy setting meeting, decided to keep its monetary policy unchanged, as widely expected, with the decision having little bearing on the market, analysts here said.

They added however, that investors were keen to hear Bank of Japan Governor Haruhiko Kuroda's remarks later in the day concerning new Prime Minister Yoshihide Suga and the bank's willingness to cooperate with the government's economic policies.

By the close of play, land transportation, nonferrous metal and transportation equipment issues comprised those that declined the most.

Among exporters losing ground on the yen's strength, Mazda Motor skidded down 3.0 percent, while Nissan Motor closed 2.4 percent lower. Sony, for its part, relinquished 1.0 percent.

East Japan Railway Co. fell 4.7 percent, after forecasting a full-year net profit loss for the fiscal year through next March owing to failing patronage due to the pandemic.

Central Japan Railway Co. also closed lower, falling 4.1 percent by the close.

Issues that rose outpaced those that fell by 1,116 to 931 on the First Section, while 127 ended the day unchanged.

On the main section on Thursday, 1.108 billion shares changed hands, dropping from Wednesday's volume of 1.168 billion shares.

The turnover on the penultimate trading day of the week came to 2.003 trillion yen (19.125 billion U.S. dollars).

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