Nikkei falls to more than 1-week lows as cyclical stocks weigh; Toshiba jumps

  • Reuters
  • Stock Market News
Nikkei falls to more than 1-week lows as cyclical stocks weigh; Toshiba jumps
Credit: © Reuters.

By Ayai Tomisawa

TOKYO, July 18 (Reuters) - Japan's Nikkei share average fell to a more than one-week low on Tuesday morning after cyclical stocks lost ground as a stronger yen hit sentiment, while Toshiba Corp rallied after news a U.S. hedge fund increased its stake in the tech company.

The Nikkei .N225 fell 0.7 percent to 19,988.69 in midmorning trade after the dollar dropped to trade at a two-week low of 112.13 yen JPY= , having lost steam after hitting a near four-month high of 114.495 a week ago.

The Nikkei hit as low as 19,943.14, the lowest level since July 7.

"U.S. yields seemed to have hit the ceiling and the dollar is weakening against the yen, and that's dragging down stocks," said Toru Ibayashi, executive director of Wealth Management at UBS Securities in Tokyo.

He also echoed investor concern over Federal Reserve Chair Janet Yellen's cautious stance on tightening in her congressional testimony last week as well as Friday's tame U.S. inflation data.

Shares in Toshiba 6502.T jumped as much as 8.7 percent to 251.7 yen after U.S. hedge fund Greenlight Capital on Friday said it had added a stake. Meanwhile, Western Digital Corp WDC.O failed to gain an immediate injunction to block the $18 billion sale of Toshiba's chip unit. Capital said that Toshiba may be worth as much as 400 yen per share once it resolves a legal dispute with Western Digital over the sale of its chip business.

Financial stocks lost ground, with the banking sector .IBNKS.T dropping 1.6 percent and the insurance sector .IINSU.T shedding 1.0 percent.

Mitsubishi UFJ Financial Group 8306.T tumbled 2.2 percent, Sumitomo Mitsui Financial Group 8316.T fell 1.3 percent and T&D Holdings 8795.T stumbled 2.4 percent.

Automakers weakened, with Toyota Motor Corp 7203.T falling 1.2 percent and Honda Motor Co 7267.T dropping 1.4 percent.

Bucking the trend, Takeda Pharmaceutical Co 4502.T surged 2 percent after a U.S. court ruled that a patent on Takeda Pharmaceutical's cancer treatment Velcade is valid. broader Topix .TOPX dropped 0.6 percent to 1,616.34 and the JPX-Nikkei Index 400 .JPXNK400 fell 0.6 percent to 14,382.28. (Editing by Sam Holmes)

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