Japanese shares dipped to a fresh nine-month low on Monday amid uncertainty over whether Tokyo will adopt further stimulus measures to prop up a sagging economy.
The Nikkei index at the Tokyo Stock Exchange fell 0.7 per cent, or 62.69 points, to 9116.69, its lowest close since November 27. The Topix index of all first section shares dropped 0.6 per cent, or 4.80 points, to 824.79.
Nikkei futures contracts also fell as investors were disappointed by a brief telephone conversation between Japanese Prime Minister Naoto Kan and Bank of Japan governor Masaaki Shirakawa.
They did not discuss specific measures on how to stem the yen’s rise in the talks, despite speculation that the government is mulling fresh stimulus programs, while the central bank might offer more easing policies.
‘‘The fact that they held a teleconference (instead of a face-to-face meeting) indicates absence of willingness (to tackle the yen),’’ Phoenix Securities manager Mamoru Nakajo told Dow Jones Newswires.
‘‘Investors will keep demanding that the government set out a clear path for policy implementation,’’ he said.
In their brief telephone conversation, Kan and Shirakawa agreed to continue their cooperation, but did not discuss intervening in the forex market to ease the rise of the yen, disappointing the market.
‘‘We still have hopes that the BoJ may ease monetary policy at the board meeting next month, so investors may not sell off sharply,’’ Yoshihiro Okumura, general manager at Chibagin Asset Management, told Dow Jones Newswires.
Investors in Tokyo were also reluctant to take large positions as they continued to keep a close eye on the yen’s rise against the US dollar. The Japanese unit firmed to 85.37 to the greenback compared with 85.63 in New York on Friday.
Government officials have recently tried to talk the yen down from current highs after the safe-haven unit strengthened beyond the trading levels assumed earlier by many exporters, who have eyed its rise with anxiety.
For every one-yen rise in the currency’s value against the dollar, companies can lose tens of billions of yen earned overseas when repatriated, threatening a sector that Japan depends on to offset its weak domestic picture.
Japanese exporters with high exposure to the eurozone market also under-performed due to the euro’s weakness against the Japanese currency.
Sony dropped 1.5 per cent to 2499. Canon lost 1.4 per cent to 3550 and Panasonic fell 0.6 per cent to 1068.Honda Motor lost 0.5 per cent to 2805, while Toyota Motor slipped 0.8 per cent to 3005.
AFP