Markets
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TOKYO, June 10 Japanese stocks fell to a
three-week low on Wednesday, erasing earlier gains after Bank of
Japan Governor Haruhiko Kuroda said that the yen was not likely
to weaken much further.
The Nikkei share average dropped 0.4 percent to
20,018.22 points by mid-afternoon, the lowest since May 19.
Earlier, it rose to as high as 20,264.92.
Kuroda, speaking to a lower house financial affairs
committee, said the real effective exchange rate shows the yen
is "very weak".
The real effective exchange rate, which is the
trade-weighted value of the yen versus other countries after
adjustments for prices, shows that the yen is near its weakest
level since the early 1973, according to BOJ data.
"Kuroda basically put a brake on the recent weakness of the
yen," said Norihiro Fujito, senior investment strategist at
Mitsubishi UFJ Morgan Stanley Securities.
"His comments were articulate enough to spook investors who
sold the dollar and Japanese shares."
Earlier in the day, Kuroda also said that the dollar may not
necessarily rise further versus the yen if the U.S. Federal
Reserve raises interest rates as traders may have already priced
the possibility of a rate hike into the market.
Exporters also turned lower, with Toyota Motor Corp
falling 0.3 percent, Honda Motor Co shedding 0.2
percent and Fuji Heavy Industries declining 0.9
percent.
The broader Topix fell 0.4 percent to 1,627.54 and
the JPX-Nikkei Index 400 shed 0.4 percent to
14,696.53.
(Reporting by Ayai Tomisawa; Editing by Kim Coghill)
