Japan stocks fall, dollar hits 8-month low vs yen | Reuters 04/08/2010 | 12:50 pm IST
Japanese stocks fell behind their Asian peers and slid 2 percent on Wednesday as the yen climbed towards 15-year highs against the U.S. dollar after weak U.S. data spurred talk of more Federal Reserve easing. Asia-Pacific stocks outside of Japan were slightly off their three-month peaks scaled on Tuesday and are seen prone to profit-taking as investors remain sensitive to any signs of fatigue in the global economy. The latest signs came in the form of disappointing U.S. consumer spending and housing market reports, which fanned speculation the Fed may further relax its loose policy at its Aug. 10 meeting and pushed the dollar to an eight-month low. European shares were set to open lower, with financial spreadbetters expecting Britain’s FTSE 100 to fall about 0.4 percent; Germany’s DAX to fall 0.2 percent and France’s CAC 40 to ease 0.1 percent. Tokyo stocks fell 2.1 percent, hit by fears that a strong yen will erode exporters’ profits and sap economic growth.
Such concerns combined with a run of disappointing U.S. data that cast a pall over recovery in the world’s largest economy, boosted Japanese government bonds, pushing the 10-year yield below 1 percent for the first time in seven years. Japan’s finance minister reiterated that he was closely watching currency moves as the dollar’s weakness tests the tolerance for a stronger yen as the economy struggles to pull out of a crippling spell of deflation. “Today’s stock fall is really all about the yen. At this kind of level, there’s inevitably worries about what sort of impact this will have on company earnings going forward,” said Toshiyuki Kanayama, a market analyst at Monex Inc. Continue reading