Tokyo stocks close sharply lower on higher yen, profit-taking

TOKYO, Japan (AFP) — Tokyo stocks closed loser on Tuesday, ending a seven-day winning streak, as a higher yen against the dollar weighed on the market and investors sought to lock in profits.

The benchmark Nikkei 225 index dropped 2.39 percent, or 538.71 points, to 22,036.05 while the broader Topix index fell 2.36 percent, or 39.85 points, to end at 1,649.20.

“The yen is edging higher” against the dollar “on geopolitical risks including violent protests in France,” which is in turn weighing on the stock market, Hiroaki Hiwata, strategist at Toyo Securities, told AFP.

“US long-term rates are lower, that’s also a factor” for the stronger yen, he added.

The dollar was at 113.15 yen in late Asian trade, down from 113.58 earlier during Tokyo time and 113.69 yen in New York.

Some investors locked in profits after seven days of rallies while concerns over other risks including longer-term trade frictions remained despite a truce between presidents Donald Trump and Xi Jinping over the weekend, analysts said.

Sharp dropped 5.73 percent to 1,627 yen after activist groups criticized it for allowing its subcontractors to cut some 2,900 foreign workers at a factory in Japan.

Other blue-chip exporters were also lower, with Sony ending down 2.74 percent at 5,954 yen and Panasonic retreating 2.02 percent to 1,160 yen.

Marine transportation company Mitsui O.S.K. Lines, which was trading in positive territory earlier after a brokerage firm upgraded its estimates on the shares, ended down 3.09 percent at 2,690 yen.

Takeda Pharmaceutical edged 0.82 percent lower to 4,195 yen ahead of an extraordinary shareholders’ meeting on Wednesday as a group of rebel investors is reportedly trying to thwart a deal with Shire.