TOKYO: Japanese stocks fluctuated as paper makers dropped and exporters rose as the yen touched the lowest level against the dollar in more than seven years.
Nippon Paper Industries Co. slumped 3.3 percent after SMBC Nikko Securities Inc. said sluggish domestic demand and a weaker yen will reduce its profit outlook. Laox Co. tumbled 18 percent as the duty-free store operator announced plans for a share sale. Fuji Heavy Industries Ltd., which gets more than half its sales from North America, added 2.3 percent. Mitsubishi Chemical Holdings Corp. jumped 1.5 percent after Credit Suisse Group AG raised its rating on the stock.
The Topix index slid 0.3 percent to 1,526.62 as of 12:56 p.m. in Tokyo after rising as much as 0.7 percent. The Nikkei 225 Stock Average dropped 0.3 percent to 18,732.94. The yen slid 0.6 percent to 121.83 per dollar, dropping for a fourth day and touching its weakest level since July 2007.
“There’s a lag between how the weak yen feeds into earnings and how stock markets perform,” said Mikio Kumada, a strategist at LGT Capital Partners, which manages more than $40 billion. “As long as Japan’s monetary policy remains easy or very easy, I think it’s inevitable that the yen will be on the weak side against the dollar.”
The Federal Reserve reviews U.S. monetary policy next week, with market participants watching to see if policy makers retain their pledge to be “patient” with raising borrowing costs.
