TOKYO: Tokyo stocks closed 0.58 percent lower on Thursday, dragged by a strong yen following a downgrade of Spain's credit rating and over the global economy.
The Nikkei 225 index at the Tokyo Stock Exchange shed 49.45 points to 8,546.78. The broader Topix index of all first-section issues fell 0.40 percent, or 2.89 points, to 713.95.
S&P said Wednesday it had cut Madrid's rating by two notches to one above "junk", citing the deepening recession and strains from the country's troubled banks.
The news further stoked eurozone debt fears, sending the yen higher against the dollar and euro as dealers sought the currency safe haven status.
The euro fell to $1.2855 and 100.24 yen in Tokyo midday trade from $1.2887 and 100.74 yen in New York late on Wednesday. The dollar slipped to 77.97 yen from 78.18 yen.
Market-players also remained nervous about strained tensions with Beijing caused by a territorial row in the East China Sea, which has hurt Japanese businesses in China, notably car giants Toyota, Nissan and Honda.
"Ongoing diplomatic friction with China looks like it will loom ever larger on business results going forward as a settlement seems nowhere in sight," said Kenichi Hirano, market analyst at Tachibana Securities.
"The risk exposure, foremostly for automakers, is very worrying," he told Dow Jones Newswires.
Nissan Motor fell 1.20 percent to 656 yen while Toyota Motor was down 1.35 percent at 2,903 yen and Honda lost 0.64 percent to 2,319 yen.
Toyota did not seem badly affected by its announcement Wednesday that it is recalling 7.43 million vehicles globally due to defective power-window switches.
The Dow Jones Industrial Average closed down 128.56 points, or 0.95 percent, at 13,344.97 Wednesday. (AFP)
