Roundup: Nikkei loses 0.67 pct on yen's tumble, concerns for import costs, share devaluation

The Nikkei stock index lost 0.67 percent Tuesday as the yen dropping to an 8-year low triggered concerns that rising import costs could weigh on domestic shares and overseas investors could start dumping Japanese issues on devaluation concerns in U.S. dollar terms.

The Nikkei 225 index fell 125.44 points to close at 18,665.11, while the broader Topix index of all first-section issues closed 0. 46 percent, or 7.01 points lower, to finish at 1,524.75.

The market opened on a fairly bright note tracking gains on Wall Street as fears that robust microeconomics data in the U.S. recently will mean the Federal Reserve will hike its interest rate sooner abated somewhat, but things took a nosedive in afternoon trade as the yen tumbled to lows against the U.S. dollar not seen since 2007.

While saying that there were concerns in the market about Japanese shares becoming devalued in U.S. terms, local analysts here also said that investors were also becoming increasingly concerned that the yen's weakness would push up import costs and could weigh heavily on domestic issues.

"There's a lag between how the weak yen feeds into earnings and how stock markets perform. But as long as Japan's monetary policy remains easy or very easy, I think it's inevitable that the yen will be on the weak side against the dollar," said Mikio Kumada, a strategist at LGT Capital Partners.

The dollar rocketed to a near eight-year high against the yen and was changing hands at 122.02 yen at one point, although eased off at 121.77 yen later on in trading hours.

Generally speaking, a weak yen lifts the market as high cap exporter issues attract buying as their firms' profit outlooks gain on increased competitiveness in overseas markets and their yields are boosted when repatriated. This tends to lift the border market.

But export-related issues closed mixed Tuesday, with top automaker Toyota skidding down 0.18 percent to 8,178 yen, while Honda gained 1 percent to close at 4,082 yen.

Consumer electronics giant Sony dropped 1.2 percent to 3,245 yen, but Camera maker Nikon added 2.7 percent to 1,701 yen and Fuji Heavy Industries also closed in positive territory, jumping 2.3 percent to end at 4,068 yen.

Financial issues came under pressure, however, with top lender Mitsubishi UFJ slumping 3.2 percent to 756 yen, while Mizuho Financial Group lost 1.18 percent at 217 yen and Sumitomo Mitsui Financial Group fell 1.6 percent to close at 4,699 yen.

Nikkei heavyweight Fast Retailing, operator of the Uniqlo chain of high street apparel stores, retreated 2 percent to end the day at 44,420 yen.

Among utilities, Kyushu Electric Power closed down 2.2 percent at 1,006 yen, after saying it will announce a net loss of 115 billion yen (950 million U.S. dollars) for the year ending March 31.

Trading volume on Tuesday rose to 2.13 billion shares on the Tokyo Exchange's First Section, up from Monday's volume of 1.79 billion shares, with declining issues beating advancing ones by 974 to 739. Endi