Tokyo stocks fell Friday morning as sentiment was dampened by declines on Wall Street after stronger-than-expected economic data diminished hopes for U.S. interest rate cuts in the coming months.
The 225-issue Nikkei Stock Average fell 454.07 points, or 1.16 percent, from Thursday to 38,649.15. The broader Topix index was down 11.11 points, or 0.40 percent, at 2,743.64.
The U.S. dollar was firm in the lower 157 yen zone in Tokyo on prospects that the U.S.-Japan interest rate differential will remain wide amid persistent inflation in the United States following unexpectedly strong manufacturing and services index readings, dealers said.
At noon, the dollar fetched 157.05-08 yen compared with 156.92-157.02 yen in New York and 156.76-77 yen in Tokyo at 5 p.m. Thursday.
The euro was quoted at $1.0808-0809 and 169.74-79 yen against $1.0810-0820 and 169.67-77 yen in New York and $1.0828-0830 and 169.75-79 yen in Tokyo late Thursday afternoon.
Stocks were weighed down by a sharp drop of the U.S. Dow Jones index as the latest economic data discouraged many investors who had been expecting the Federal Reserve to start cutting interest rates as early as September, analysts said.
Technology shares were sold on concerns about higher borrowing costs in Japan, with the benchmark 10-year government bond yield moving around 1 percent amid speculation that the Bank of Japan is shifting to normalize its monetary easing policy.
