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Tokyo: Stocks open sharply lower on stronger yen


[TOKYO] Tokyo stocks opened sharply lower on Friday as a stronger yen hit exporters, despite modest gains on financial markets in Europe and on Wall Street.

European and US shares mostly firmed Thursday despite another drop in oil prices ahead of an eagerly awaited US jobs report for January later on Friday.

US stocks advanced despite veering into negative territory a couple of times in a choppy session, as oil prices closed lower and US data showed a drop in fourth-quarter productivity and a rise in weekly jobless claims.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange dropped 1.49 per cent, or 254.46 points, to open at 16,790.53 in early trade, while the broader Topix index of all first-section shares was down 1.45 per cent, or 20.20 points, at 1,368.61.

The greenback edged up slightly to 116.83 yen from 116.74 yen Thursday in New York. However, it was down sharply from a high of 121.45 yen at the start of the week.

A stronger yen hurts exporters' profitability and tends to knock demand for their shares.

The BoJ shocked investors last week and sent the yen tumbling after saying it would adopt a negative interest rate policy, stoking a brief global equities rally.

That step, an add-on to existing massive stimulus measures, effectively means it charges banks to park new deposits with it - a move aimed at ramping up lending to people and businesses in order to kick-start the economy.

"The Bank of Japan has done what they should, but what they could do had its limits," Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.

"Until now, the view on the US economy was that it was recovering, but the pace wasn't as fast as hoped. Now there's some concern in the market that it may actually be contracting." On Wall Street, the Dow closed up 0.49 per cent, the S&P 500 gained 0.15 per cent, and the Nasdaq was 0.12 per cent higher.