Japanese stocks shot lower on Wednesday, as Tokyo was weighed by
the yen's strength, on a day of broadly negative trading in
Asia.
The Nikkei fell 1.8% in early trading as Japan came back online
after a two-day public holiday break to a stronger yen. At
Yen101.60, to the dollar, the currency had firmed significantly
since the end of last week, when it was trading at Yen102.21.
The yen has strengthened as tensions between Ukraine and Russia
have ratcheted up. On the horizon, the markets are looking to
Federal Reserve Chairwoman Janet Yellen, who is scheduled to
testify on monetary policy later in the day, for comments that
could impact the dollar side of the currency pair.
"The stubbornly strong yen, and uncertainty over how much of a
bite the [April 1] national consumption tax hike will take out of
the economy, continue to plague stocks, and this will not end until
definitive figures come out allaying the jitters," said Norihiro
Fujito, senior investment strategist at Mitsubishi UFJ Morgan
Stanley Securities.
Elsewhere, the region was coming back to life after a quiet
session on Tuesday, when much of the region was closed for public
holidays. Japan, Hong Kong and South Korea were all closed in the
previous session. There was a negative overnight lead from the
U.S., where Wall Street ended lower due to falls in small
high-growth stocks and Internet stocks.
Australia's S&PASX 200 lost 0.6% and South Korea's Kospi
dropped by 0.3%.
Chinese economic data will be in focus for the rest of the week,
with trade data coming on Thursday, which will be followed by
inflation numbers on Friday. At the beginning of the week, data
showed further weakness in China's manufacturing sector, which
weighed on Hong Kong stocks Monday.
Bradford Frischkorn contributed to this article.
Write to Daniel Inman at daniel.inman@wsj.com
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