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Tokyo stocks open lower on yen ahead of US-Japan talks

Tokyo stocks opened lower on Thursday, dragged down by a higher yen and caution ahead of Japan-US trade talks.

A man walks past a stock indicator showing share prices on the Tokyo Stock Exchange in Tokyo on July 13, 2018. Tokyo stocks opened higher on July 13 helped by a cheaper yen and rebounds on US markets. / AFP PHOTO / Kazuhiro NOGI

Tokyo stocks opened lower on Thursday, dragged down by a higher yen and caution ahead of Japan-US trade talks.

The benchmark Nikkei 225 index dropped 0.26 percent or 58.27 points to 22,586.04 in early trade while the broader Topix index was down 0.30 percent or 5.30 points at 1,739.41.

“As the yen appreciated a bit, selling to lock in profits will likely lead in early trade,” Okasan Online Securities chief strategist Yoshihiro Ito said in a commentary.

The dollar sank to 110.77 yen from 110.96 yen in New York Wednesday afternoon and well above 111 yen in Tokyo on Wednesday, in a negative development for Japanese exporters.

Ito also predicted “a wait-and-see mood will grow during the day with investors watching Chinese stocks, the yuan’s exchange rates and Japan-US trade talks”.

In the midst of a bitter trade spat with China, US Trade Representative Robert Lighthizer is to meet with Japan’s economic revitalisation minister Toshimitsu Motegi in Washington later Thursday.

Japan is hoping to win concessions on threatened US tariffs on the auto sector that could deal a major blow to the industry if implemented.

“Although concrete outcomes are not expected, we may still get a sense of how far apart or not the two nations are,” Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, said in a client note.

Automakers were lower, with Toyota down 0.55 percent at 7,022 yen.

Selling was particularly heavy for Suzuki Motor and Mazda after media reports that both carmakers cheated on fuel efficiency and emissions tests in the latest data-falsification scandal to hit Japanese companies in recent years.

Suzuki tumbled 3.32 percent to 7,144 yen and Mazda lost 1.67 percent to 1,322 yen.

SoftBank Group was down 1.94 percent to 10,325 yen after Bloomberg reported Tesla chief Elon Musk and SoftBank head Masayoshi Son held unsuccessful talks last year about the Japanese group investing in the US electric car maker.

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