TOKYO: Tokyo stocks fell 1.40 percent on Monday, giving up earlier gains as Asian shares fell, while a ratings agency downgraded Softbank to junk after its multi-billion-dollar acquisition of Sprint Nextel.
The benchmark Nikkei 225 index shed 200.63 points to 14,109.34, losing the extra weight it put on in the morning session, while the Topix index of all first-section shares shed 1.35 percent, or 16.00 points, to 1,172.58.
Ratings agency Standard & Poor's downgraded Softbank two notches to BB+ after it bought US-based Sprint Nextel, which in turn dragged on the Nikkei, while losses in Chinese shares also fuelled selling, analysts said.
"The rating cut was clearly deeper than expected, and it took SoftBank to well under investment grade," Monex market analyst Toshiyuki Kanayama told Dow Jones Newswires.
"But the selling may only be limited to today, or at worst, a few days, since the firm's big takeover deal has now been given regulatory approval.
"Investors believe in the company and have faith in its management, including (company head Masayoshi) Son, to grow the company. Shares have been bid up to the point where players were almost looking for an excuse to sell them down."
SoftBank ended down 3.4 percent at 5,680 yen, falling immediately after S&P's midday cut of its long-term credit rating from BBB to BB+, citing its Sprint Nextel acquisition, the largest M&A deal in Japanese corporate history.
The greenback slid against the Japanese unit to 100.99 yen in Tokyo afternoon trade from 101.14 late Friday in New York.
The euro was changing hands at $1.2827 and 129.54 yen in Monday afternoon trade, compared with $1.2832 and 129.78 yen in New York Friday.
The greenback surged against the yen late last week, bolstered by a firm US job creation report that boosted confidence in growth of the world's largest economy and pushed bond yields up sharply.
On Wall Street on Friday, the Dow Jones Industrial Average jumped 147.29, or 0.98 percent, to 15,135.84 at the closing bell.
The gains came after the Labor Department reported the US economy added 195,000 jobs in June, well above the consensus estimate of 166,000 jobs.
The report reinforced expectations that the Federal Reserve would soon begin tapering its bond-buying programme, and sent US Treasury yields sharply higher.
But the dollar eased against the yen late Monday in Tokyo, a negative for Japanese stocks, with exporters among the victims: Sony Corp was down 1.95 percent at 2,152 yen and Tokyo Electron dipped 0.20 percent to 4,830 yen.
Japan introduced new nuclear safety regulations on Monday, with utilities asking authorities for permission to restart reactors.
Four utilities have submitted applications for the re-firing of 10 nuclear reactors in five plants, their first such requests since the Fukushima disaster two years ago.
However, Tokyo Electric Power Co, which made no submission, rose 4.31 percent to 628 yen, but Kansai Electric Power Co, who asked the watchdog to look at four of its reactors, was down 1.74 percent at 1,404. (AFP)
