Tokyo stocks fell Tuesday morning as a stronger yen against the U.S. dollar weighed on exporters, while automakers were also hit by a safety test scandal that led them to halt some vehicle shipments.
The 225-issue Nikkei Stock Average fell 173.78 points, or 0.45 percent, from Monday to 38,749.25. The broader Topix index was down 12.85 points, or 0.46 percent, at 2,785.22.
The dollar traded in the lower 156 yen zone, losing ground overnight on the prospect of a narrowing gap between U.S. and Japanese interest rates after sluggish U.S. manufacturing data for May fueled expectations that the Federal Reserve will cut rates later this year, dealers said.
At noon, the dollar fetched 156.37-38 yen compared with 155.98-156.08 yen in New York and 157.11-13 yen in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.0907-0908 and 170.55-58 yen against $1.0899-0909 and 170.09-19 yen in New York and $1.0839-0840 and 170.30-34 yen in Tokyo late Monday afternoon.
Shares were weak from the outset of trading as a pause in the yen's recent depreciation against the dollar put downward pressure on export-related shares, brokers said. A stronger yen reduces the overseas profits of exporters when repatriated.
Automakers were among the decliners as the transport ministry ordered Toyota, Mazda and Yamaha Motor to suspend shipments of some vehicles after finding irregularities in certification applications for certain models, the brokers added.
