Tokyo stocks fell Wednesday morning, as expectations the yen will firm against the U.S. dollar dented exporters while financial stocks dropped on concerns over their earnings outlook.
The 225-issue Nikkei Stock Average fell 309.86 points, or 0.80 percent, from Tuesday to 38,527.60. The broader Topix index was down 32.24 points, or 1.16 percent, at 2,755.24.
The dollar edged up to the mid-155 yen range in late morning, after weakening overnight as U.S. long-term interest rates fell to raise prospects of a narrowing of the U.S.-Japanese interest rate gap, dealers said.
At noon, the dollar fetched 155.48-49 yen compared with 154.86-96 yen in New York and 155.38-40 yen in Tokyo at 5 p.m. Tuesday.
The euro was quoted at $1.0883-0884 and 169.21-24 yen against $1.0873-0883 and 168.41-51 yen in New York and $1.0889-0891 and 169.20-24 yen in Tokyo late Tuesday afternoon.
The stock market was pressured by heavy selling of insurance and banking stocks as concerns grew stronger that a fall in U.S. interest rates may squeeze their profitability.
Among exporters, automakers were mostly lower, as market players became cautious that the yen's stronger tone could trim their overseas profits when repatriated. Tech issues also fell on an overnight drop in a key U.S. semiconductor index, brokers added.
