Tokyo stocks retreated Tuesday for the first decline in three days, as automakers were hit by a firm yen and a safety test scandal that led to them halting some vehicle shipments.
The 225-issue Nikkei Stock Average ended down 85.57 points, or 0.22 percent, from Monday at 38,837.46. The broader Topix index finished 10.59 points, or 0.38 percent, lower at 2,787.48.
On the top-tier Prime Market, mining, insurance, and oil and coal product issues were among the other decliners.
The U.S. dollar remained weak in the lower 156 yen range in Tokyo after weaker-than-expected U.S. manufacturing data for May raised prospects of an interest rate cut by the Federal Reserve as early as September, dealers said.
Stocks remained weak throughout the day due to a pause in the yen's recent depreciation against the dollar, weighing on auto and other export-related issues, brokers said. A stronger yen reduces the overseas profits of exporters when repatriated.
Investors were also cautious as the transport ministry ordered Toyota Motor Corp., Mazda Motor Corp. and Yamaha Motor Co. to halt shipments of some vehicles after finding irregularities in certification applications for certain models.
"If the suspension of shipments prolongs, it could hurt the overall Japanese economy," said Shingo Ide, chief equity strategist at the NLI Research Institute.
