Tokyo stocks close lower on yen's rise after Fed dovish stance

Tokyo stocks closed lower Wednesday as the yen's appreciation against the U.S. dollar after U.S. Federal Reserve Chair Janet Yellen's dovish remarks on the pace of rate hikes saw investors assume cautionary positions.

The 225-issue Nikkei Stock Average ended down 224.57 points, or 1.31 percent, from Tuesday at a near two-week closing low at 16,878.96.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, finished 21.31 points, or 1.55 percent, lower at 1,356.29.

Local brokers said the dollar selling and yen buying following Yellen's remarks pushed the Japanese currency higher, which impacted export-linked shares, the firms of which rely on a weak yen to boost repatriated profits from overseas markets.

The dollar was changing hands in the afternoon between 112.48-49 yen compared with 112.67-77 yen in New York and 113.69-70 yen in Tokyo at 5:00 p.m. local time on Tuesday.

Typically, traders here added, when the yen rises and issues widely exposed to foreign markets retreat, the broader market is also dragged down.

Other analysts said data this morning showing that Japan's industrial output slumped 6.2 percent on month in February, did little to bolster investor sentiment, as recessionary fears loom large.

Automaker-related issues were pressured by Takata plummeting 20 percent, after sources said the struggling airbag supplier's costs related to a recall of potentially fatal airbag inflators cost the Japanese manufacturer 24 billion U.S. dollars.

The 20 percent drop to 414 yen, was Takata's daily loss limit.

All industry categories on the main section closed in negative territory Wednesday, with marine transportation, bank, and nonferrous metal-linked stocks comprising notable decliners.

The day's turnover was 2,000.4 billion yen (17.80 billion U.S. dollars). Enditem