Tokyo stocks open lower as yen rises on US tax doubts

TOKYO — Tokyo stocks opened marginally lower on Thursday as the yen picked up against the dollar on concerns about a possible delay to US tax reform.

The benchmark Nikkei 225 index slipped 0.17 per cent, or 36.89 points, to 21,991.43 in early trade while the broader Topix was down 0.28 per cent, or 4.88 points, at 1,739.13.

The indices later moved into positive territory as investors picked up bargains.

The Japanese stock market will likely be kept under pressure on Thursday by lower US stock prices and the yen’s appreciation, Okasan Online Securities said.

“However, the Nikkei index is in the middle of a new uptrend over the mid- and long term,” it said. 

Investors “may as well buy on drops without being swayed by an ambiguous market mood”, the brokerage said in a client note.

The key market gauge hit a quarter-century high last week but fell for a sixth straight day to Wednesday.

Wall Street also dropped on Wednesday as weak oil prices and fears of a delay in US tax reforms hurt investor sentiment.

The dollar has also faced selling.

The greenback was changing hands at 112.97 yen early Thursday, slightly up from 112.85 in New York on Wednesday afternoon but still down from 113.21 yen in Tokyo earlier in the day. 

A stronger yen is usually a drag on the Tokyo stock market as it erodes the profitability of Japanese exporters.

SoftBank rose 1.60 per cent to 9,490 yen after Bloomberg News reported the high-tech giant planned to invest as much as $25 billion in Saudi Arabia over the next three to four years.

Energy stocks continued to fall, with oil explorer Inpex off 1.98 per cent at 1,256.5 yen.