Japanese stocks drop to 1-1/2-week low on Wall Street rout, firmer yen

  • Reuters
  • Stock Market News
Japanese stocks drop to 1-1/2-week low on Wall Street rout, firmer yen
Credit: © Reuters.

SYDNEY, June 12 (Reuters) - Japanese shares skidded to 1-1/2-week lows on Friday after Wall Street dived on fears that a resurgence of COVID-19 infections could stunt the pace of reopening economies.

The benchmark Nikkei average .N225 settled 0.75% lower at 22,305.48, its weakest close since June 1, erasing some of the earlier losses on a positive lead from U.S. futures.

For the week, the Nikkei was down 2.4%, logging its biggest decline in seven weeks.

U.S. shares plummeted on Thursday as investors reacted to renewed fears of a pandemic resurgence and digested dour economic forecasts from the Federal Reserve, with all three major indexes losing well over 5%. However, E-Mini futures for the S&P 500 ESc1 were last quoted up 1.4%. .N MKTS/GLOB

In the currency market, the safe-haven yen stood firm on renewed pessimism over a quick economic recovery, with the dollar/yen JPY=EBS hitting 106.58 overnight, a level unseen in a month. FRX/

As a stronger yen hurts Japanese manufacturers' profits made abroad when repatriated, shares of export-oriented automakers remained under pressure, with Honda Motor 7267.T shedding 1.8% and Subaru 7270.T falling 1.2%.

"The ongoing steep correction shows you what type of investors and money is playing in these markets and how fragile the rally was," said Takeo Kamai, head of executions services at CLSA in Tokyo.

The broader Topix .TOPX lost 1.15% to 1,570.68, also its lowest close since June 1, with all but one of the 33 sector sub-indexes on the Tokyo exchange finishing lower.

Highly cyclical mining .IMING.T , metal products .IMETL.T and non-ferrous metals .INFRO.T were among the worst performing sectors on the main bourse.

Oil and gas exploration companies Inpex 1605.T and Japan Petroleum Exploration 1662.T fell 2.4% and 4.1%, respectively, as oil prices extended heavy overnight losses. O/R

Nichiigakkan 9792.T advanced 3.7% after Hong Kong-based investment fund LIM Advisors said in a letter to management that Bain Capital's tender offer "substantially" undervalued the nursing home operator.

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