TOKYO: Tokyo stocks closed 1.14 percent lower on Thursday as a stronger yen helped erase early gains stoked by strong data on US new home sales.
The benchmark Nikkei 225 index ended down 168.35 points at 14,562.93, while the Topix index of all first-section shares slipped 1.44 percent, or 17.60 points, to 1,202.32.
"The market remains somewhat overheated, and lacking in wholly fresh, positive trading cues," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
The dollar had risen against other major currencies on Wednesday after strong sales of new US homes triggered fresh talk that the Federal Reserve will wind down its massive stimulus programme soon.
But the greenback slipped in afternoon Tokyo trade, to 99.90 yen from 100.26 yen in New York on Wednesday. A stronger yen tends to weight on the Tokyo stock market as it's a negative for exporters.
Summer holidays and investors awaiting a slate of corporate earnings in Japan next week had many players keeping to the sidelines, dealers said.
"With no significant events on the immediate horizon, many portfolio managers are now opting to take their summer holidays, sapping inertia from the market," said Tatsunori Kawai, chief strategist at kabu.com Securities.
Nissan was down 0.53 percent at 1,112 yen.
Kao, the parent of cosmetics firm Kanebo, fell 3.40 percent to 3,120 yen after the subsidiary said more than 2,000 Japanese had complained about skin discolouring after using its whitening products while it had also widened a consumer recall outside Japan. Kao shares lost more than six percent on Wednesday.
Canon tumbled 5.39 percent to 3,245 yen after the camera and copier maker cut its full-year profit forecast by 10 percent on fears about slowing digital camera sales in China and Europe.
US stocks Wednesday closed mostly lower, with weak earnings and a gloomy outlook from Caterpillar helping to push the Dow 0.16 percent lower after it ended at a new record high on Tuesday. (AFP)
