Tokyo shares at lowest level since November

Japanese shares fell 0.38 percent to an almost nine-month low on Tuesday on investor fears over the strong yen and amid thin trade during the summer holiday season, analysts said.

 TOKYO, Aug 17, 2010 (AFP) - Japanese shares fell 0.38 percent to an almost nine-month low on Tuesday on investor fears over the strong yen and amid thin trade during the summer holiday season, analysts said.

The benchmark Nikkei index of the Tokyo Stock Exchange dropped 34.99 points to 9,161.68, the lowest close since November 27. The Topix index of all first-section shares fell 0.22 percent, or 1.85 points, to 826.78.

"The current downward trend (in stocks) will likely be snapped only after shares go another stage lower in a high-volume market," Hisatsune Kobayashi, senior market analyst at Nikko Cordial Securities, told Dow Jones Newswires.

He added that multiple catalysts are necessary for the Nikkei to rebound, such as monetary easing from the Bank of Japan and additional stimulus measures from both the Japanese and key trade partner China.

Japanese Minister of Economy and Fiscal Policy Satoshi Arai said Tuesday that Prime Minister Naoto Kan's cabinet would start discussing a possible fresh stimulus package later this week.

"Our prime minister will hold hearings on August 20 from ministries and agencies concerned on the present economic situations," Arai said.

News reports also said that Kan and Bank of Japan Governor Masaaki Shirakawa are expected to meet on Monday to discuss the recent yen rise.

A man walks in front of a share price board in Tokyo on August 17, 2010

The dollar fell to 85.29 yen in Tokyo afternoon trade, from 85.34 yen late Monday in New York. Dealers said the dollar remains under pressure, and there were rumours Japanese authorities may intervene in the currency market.

"It has become easier for the Bank of Japan to take action following weak GDP figures released yesterday," said Yoshinori Nagano, senior strategist at Daiwa Asset Management.

Japan said Monday its economy grew at the slowest pace in three quarters during April-June, sharply missing forecasts as exports and consumption cooled off.

Technology exporters were generally lower, with digital camera maker Olympus slipping 2.03 percent and electronic parts maker TDK down 1.31 percent.

Among positive performers, electronics maker Sharp was up 0.93 percent and brewer Kirin Holdings rose 0.76 percent as hopes for higher beer demand due to a hot summer offset its poor first quarter earnings reports, dealers said.

AFP

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