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Tokyo stocks decline at end of trade, Nikkei slumps 254.52pts

Tokyo stocks decline at end of trade, Nikkei slumps 254.52pts

TOKYO: Stocks extended losses on the Tokyo Stock Exchange Thursday, dragged down by the yen’s ascent against the dollar.

The Nikkei retreated 254.52 points, or 1.32 percent, to end at 19,046.55. On Wednesday, it fell 191.53 points.

The Topix closed down 15.23 points, or 0.98 percent, at 1,540.35, after shedding 13.15 points the previous day.

The slump came after U.S. equities dropped on Wednesday amid a further decline in crude oil futures prices, brokers said

The dollar’s drop below ¥122 dampened investor sentiment, according to brokers.

The Nikkei average resisted falling below 19,000, but active purchases were held in check amid a lack of fresh incentives.

In addition, investors retreated to the sidelines ahead of the release of the Bank of Japan’s tankan quarterly business sentiment survey for December and the U.S. Federal Reserve’s policy meeting next week, brokers said.

“A risk-averse mood grew as the situation went against investor expectations that the dollar would gradually go up ahead of the FOMC meeting,” Masashi Oguchi of Mito Securities Co.’s Investment Information Department said, referring to the Fed policy meeting where the U.S. central bank is expected to raise interest rates.

“The yen rose partly because concerns grew over the U.S. economy due to falling crude oil prices,” an official at a bank-affiliated securities firm said.

Furthermore, Thursday’s data that showed business sentiment among major companies worsened in October-December from the previous quarter dealt a blow to hopes for upward revisions in corporate earnings outlooks, another securities firm official said.

But many brokers believe that stocks are likely to attract buying on dips if the Nikkei average falls below 19,000, a development that will leave investors feeling that stocks are undervalued.

Depending on the results of the key events next week, the Tokyo market is expected to turn up, the bank-affiliated securities firm official said.

Falling issues far outnumbered rising ones 1,617 to 232 in the TSE’s first section, while 74 issues were unchanged.

Volume decreased to 1,865 million shares from Wednesday’s 2,043 million shares.