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Tokyo: Stocks open down 0.72%


[TOKYO] Tokyo stocks opened 0.72 per cent lower Monday after the dollar slipped against the yen on a mixed US jobs report last week.

The Nikkei 225 index at the Tokyo Stock Exchange was down 122.11 points at 16,758.27 at the start.

"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.

The dollar was at 114.47 yen early Monday, down from 114.62 yen in New York Friday afternoon and 115.39 yen in Tokyo earlier Friday.

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

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

The Labor Department reported on Friday the economy added 214,000 jobs last month, weaker than the 235,000 consensus analyst estimate.

But the previous two months' job gains were revised upward by a total of 31,000, and the department said the unemployment rate slipped a tenth of a percentage point to 5.8 per cent, a six-year low.

The euro bought US$1.2465 and 142.68 yen early Monday against US$1.2456 and 142.78 yen in US trade Friday.

New York shares on Friday edged to fresh records.

The Dow Jones Industrial Average gained 0.11 per cent to 17,573.93, and the S&P 500 edged up 0.03 per cent to 2,031.92, both posting a record close for the third straight day.