Japan’s Nikkei ends lower as strong yen hurts appetite

TOKYO – Japan’s Nikkei share average snapped a three-day winning streak to end lower on Friday as a stronger yen dampened appetite. However, investors scooped up stocks with a strong outlook, capping declines.

The Nikkei fell 0.72% to close at 38,787.02, and was down 1.28% for the week.

The broader Topix slipped 0.54% to 2,737,23.

“With the yen on the rise, the market was worried that the Japanese firms’ earnings next (fiscal) year would not be as strong as this year,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

The yen climbed to a nine-week high as market players piled on bets in favor of more interest rate hikes by the Bank of Japan this year.

A stronger Japanese currency tends to hurt exporters’ shares as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.

Investors also sold stocks as the market ran out of positive cues after Japan’s quarterly earnings season peaked.

“We have seen a series of robust outcomes for the third quarter. With only one more quarter remaining, investors expect little positive surprises for the full year,” Kamada said.

Tokyo Electron 8035.T slipped 4% to drag the Nikkei the most, even as the chip-making equipment maker’s operating income in the third quarter jumped 50.7% from a year earlier.

Nikon slid 9.27% after the camera maker lowered its annual operating profit outlook.

Subaru soared 9.21% after the automaker lifted its annual operating profit forecast.

Kao rose 3.75% after the cosmetics maker raised its annual net profit forecast to 116 billion yen (USD 765.9 million), up 7.6% from the previous year.

Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 45% rose, 50% fell, while 3% traded flat.

(USD 1=151.4600 yen)

(Reporting by Junko Fujita; Editing by Sumana Nandy)