Tokyo stocks slipped Thursday morning as sentiment was dented by declines in some European markets on concerns about possible political turmoil linked to an upcoming parliamentary election in France.
The 225-issue Nikkei Stock Average fell 246.66 points, or 0.64 percent, from Wednesday to 38,324.10. The broader Topix index was down 19.08 points, or 0.70 percent, at 2,709.56.
The U.S. dollar strengthened to the lower 158 yen range in Tokyo on prospects that the interest rate differential between Japan and the Unites States will remain wide for a while.
At noon, the dollar fetched 158.05-10 yen compared with 157.89-92 yen in London at 4 p.m. and 157.74-75 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.0738-0742 and 169.71-83 yen against $1.0736-0737 and 169.36-40 yen in Tokyo late Wednesday afternoon.
U.S. financial markets were closed Wednesday for a public holiday.
Stocks fell as many participants sat on the sidelines after the U.S. holiday, while the market was weighed down by fears of political uncertainty in France, with the far-right National Rally projected to gain momentum in the snap election.
Uncertainties over how much the Bank of Japan will decide to cut bond purchases at its July policy meeting also made investors reluctant to buy stocks, said Seiichi Suzuki, chief equity market analyst at the Tokai Tokyo Intelligence Laboratory Co.
"Many players are becoming cautious as they haven't experienced a change toward tighter monetary conditions in Japan," Suzuki said.
