Japanese Stocks Swing to Losses as Yen Strengthens, China Slumps

  • Topix index reverses earlier gain of as much as 1.7%
  • Investors assess outcome of finance ministers' meeting

Japanese stocks fell, erasing gains from earlier in the day, after the yen strengthened as Chinese shares slumped.

The Topix index slid 1 percent to 1,297.85 at the close of trading in Tokyo, reversing gains of as much as 1.7 percent in the morning session. Volume on the Japanese measure was 11 percent below the 30-day average. The Nikkei 225 Stock Average fell 1 percent to 16,026.76. The yen jumped 1 percent to 112.85 per dollar, after dropping 0.9 percent on Friday.

“China’s share market has started to show signs of unrest again,” said Yoshihiro Okumura, a general manager at Chiba-Gin Asset Management Co. in Tokyo. “A full-scale regression in the yen is looking unlikely right now.”

Oil and coal producers led declines among the 33 Topix industry groups while carmakers gained. Nissan Motor Co. surged 5.5 percent after announcing plans to buy back 400 billion yen ($3.52 billion) worth of shares. Nintendo Co. fell 1 percent after halving its outlook for profit this fiscal year. Sapporo Holdings Ltd. slid 5.9 percent, its biggest loss since August, after JPMorgan Chase & Co. downgraded the brewer.

The Shanghai Composite index slumped as much as 4.6 percent to the lowest level since November 2014, following the conclusion of the Group of 20 meeting in Shanghai.

“It’s disappointing that there’s no concrete measure outlined in the G-20 statement,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo said by phone. 

G-20 Communique

Finance ministers from the world’s biggest economies didn’t provide the coordinated stimulus plan some investors had hoped for at a meeting in Shanghai, with the G-20 communique committing governments to do more when it comes to supporting growth. Japan’s most recent round of monetary easing was a focus, amid concern it could spur a round of competitive currency devaluations, said Eurogroup chief Jeroen Dijsselbloem. 

Policy makers from Japan and China have indicated the need for more fiscal stimulus to combat a global slowdown.

E-mini futures on the Standard & Poor’s 500 Index lost 0.7 percent after the underlying equity gauge closed 0.2 percent lower on Friday.

Data released in Tokyo Monday showed industrial production rose 3.7 percent in January from December, though fell 3.8 percent from a year earlier. Retail sales dropped 1.1 percent from December.

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