Roundup: Nikkei drops 0.95 pct as geopolitical concerns, poor CPI data trigger profit-taking

The Nikkei stock index dropped 0.95 percent Friday to a near two-week closing low as a selloff on Wall Street overnight promoted profit-taking here amid concerns about Yemen, and worse-than-expected inflation data soured the market mood.

The Nikkei 225 index lost 185.49 points to close the week at 19, 285.63, while the broader Topix index of all first-section issues fell 1.02 percent, or 16.04 points, to finish at 1,552.78.

U.S. shares took a tumble overnight, brokers here said, as news emerged that Saudi Arabia launched airstrikes against rebel positions in Yemen, in support of Abd-Rabbu Mansour Hadi who had to flee his presidential premises after it was struck by an air attack on Wednesday.

Traders here said that in particular shipping issues took a battering Friday, due to the crisis in Yemen, on rising fears that oil sea lanes could be disrupted.

Also in times of geopolitical concern, investors tend to switch out of risky assets like stocks and into safe havens like yen currency. Such moves drive the yen up versus its counterparts.

As such, in currency markets the U.S. dollar was changing hands at 119.15 yen, compared to 119.18 yen logged in New York. A firmer yen negatively impacts exporters as well as the broader market.

Analysts also said that data released in the morning here showing that Japan's annual core consumer inflation rate slid to zero in February, marking its lowest level in nearly two years as a fall in oil prices continued to weigh, contributed to dragging the market down.

The ministry's data showed that growth had been the slowest since May 2013, and, excluding volatile fresh food prices, came in at 102.5 against the base of 100 set in 2010.

While factoring out the effects of April's tax hike, consumer prices slid from a 0.2 percent rise logged in January to zero in February, as energy prices diving 2.1 percent in the recording period dragged down the nation's overall inflation, sparking concerns from economists about the central bank's lofty reflation efforts and its ultimate two percent inflation target.

"The fact that core inflation was zero isn't great from a fundamental perspective," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking.

In share trading, shipping issues sank on fears that the Yemen crisis could disrupt arterial routes for crude, and Nippon Yusen slumped 4.9 percent to 351 yen, while Kawasaki Kisen dropped 2.1 percent to end at 328 yen.

Top automaker Toyota skidded down 1.44 percent to 8,481 yen, after announcing plans to cut development costs by overhauling its production operations.

Nikkei heavyweight Fast Retailing, operator of the Uniqlo chain of apparel stores, edged down 0.22 percent to 46,225 yen, and air transportation issues also weighed, with ANA Holdings Inc. falling 1.8 percent to close at 323 yen.

Toshiba dropped 3.4 percent to 513 yen, after SanDisk slashed its revenue forecast on falling demand for its memory cards, which comprised a significant portion of Toshiba's income in the last quarter.

But Panasonic Corp. marked a bright spot on the last trading day of the week, jumping 3.9 percent to 1,576 yen, after the electronics maker announced a profit forecast of 430 billion yen ( 3.6 billion U.S. dollars) next fiscal year, ahead of analysts' estimations.

Canon also closed in positive territory Friday, advancing 1.27 percent to close the week at 4,253 yen.

Trading volume on Friday rose to 2.56 billion shares on the Tokyo Exchange's First Section, up from Thursday's volume of 2.29 billion shares, with declining issues outpacing advancing ones by 1,507 to 304. Endi