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Tokyo stocks down 0.72% by break

TOKYO: Tokyo stocks slipped 0.72 percent Monday morning as profit-taking and a stronger yen offset another record-breaking lead from Wall Street.

The Nikkei 225 index at the Tokyo Stock Exchange eased 122.28 points to 16,758.10 by the break, while the Topix index of all first-section shares was off 0.42 percent, or 5.71 points, at 1,357.96.

Traders took a breather after sending the market surging more than 10 percent over the past two weeks, helped by a weaker yen after the Bank of Japan boosted its monetary easing programme.

“Given that a great deal of the market’s gains over the last several days and months have come on the back of a stronger US currency, its weakness naturally invites profit-taking,” said Nomura Securities equity market strategist Junichi Wako.

He added, however, that “a severe selloff is unlikely”, partly because the Bank of Japan and government pension funds are known to be buying on the dip.

On forex markets, the dollar slipped to 114.22 yen, down from 114.62 yen in New York and sharply lower than the 115.39 yen in Tokyo earlier Friday.

A strong yen is negative for Japanese exporters as it makes them less competitive abroad and erodes the yen value of their repatriated profits.

Toyota fell 1.30 percent to 6,728.0 yen and Canon was off 0.64 percent at 3,531.0 yen but Sony bucked the trend, rising 1.83 percent to 2,299.5 yen.

The dollar weakened Friday after a mixed US jobs report did little to alter expectations of a change in the Federal Reserve’s interest rate outlook.

On Friday, The US Labor Department said the world’s number one economy added 214,000 jobs last month.

While that figure was weaker than the forecasted 235,000, the previous two months’ job gains were revised upward and the unemployment rate slipped to a six-year low.

The Dow gained 0.11 percent and the S&P 500 edged up 0.03 percent, both at record highs for the third straight day.-AFP

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