Tokyo stocks fell on Monday morning as the yen strengthened against the dollar and investors cashed in recent gains, while sentiment was also hit by concerns over President Donald Trump’s controversial immigration moves.
The Nikkei enjoyed a healthy run last week as traders tracked a record performance on Wall Street and the yen retreated against the greenback on expectations Trump will follow through with economy-boosting fiscal measures.
However, a weak reading on US growth on Friday was followed by Trump’s executive order banning travellers from seven Muslim-majority countries, which has been met with widespread global protest and condemnation.
The move followed a series of divisive outbursts by the tycoon in his first week in office, including a row with Mexico over trade and his proposed border wall, rows with the media over his inauguration crowds and unsupported assertions that millions of people voted illegally in the 2016 election.
“Concerned about uncertain elements such as Trump’s policies, players are adjusting their positions following the recent gain,” said Hikaru Sato, senior technical analyst at the investment strategy section at Daiwa Securities.
The benchmark Nikkei 225 index, which gained more than 1.7% last week, lost 0.74%, or 144.62 points, to 19,322.78 by the break on Monday.
The Topix index of all first-section issues was down 0.7%, or 10.80 points, at 1,538.45.
“The appreciation of the yen also pressured exporters,” Sato told AFP.
A stronger yen is a negative for Japanese exporters because it makes their products less competitive abroad and shrinks repatriated profits.
The dollar fell to 114.39 yen on Monday from 115.06 yen in New York.
Japan’s latest earnings season kicks into high gear this week, with Sony, Panasonic and Nintendo among those reporting.
The Bank of Japan’s first policy meeting of 2017 and Japanese economic data are also in focus, analysts said.
US stocks finished little changed on Friday following a lacklustre fourth-quarter growth report and some high-profile earnings disappointments including from Chevron, Google parent Alphabet.
The Dow ended the week with a small loss, having broken the 20,000 point mark for the first time on Wednesday.
In Tokyo trading, Toshiba dropped 4.15% to 249.1 yen after news reports said some trust banks are preparing to sue the company for damage related to a massive accounting scandal.
News reports also said Toshiba’s chairman would step down to take responsibility for huge write-downs in its US nuclear operations, which have prompted the firm to spin off its memory chip business.
Toyota fell 0.52% to 6,669 yen, while Sony lost 0.28% to 3,495 yen.
Fast Retailing, operator of the Uniqlo clothing chain, dropped 1.6% to 36,370 yen, while SoftBank lost 1.2% to 8,869 yen.