Japan’s Nikkei share average tumbled to a six-week low on Tuesday morning after the stronger yen hurt the overall market mood, while a drop in Fast Retailing Co weighed after the clothing company reported a poor monthly sales.
Investors also sold oil shares, spooked by a sharp fall in crude prices.
The Nikkei fell 2.1 per cent to 15,789.97 in mid-morning trade after hitting as low as 15,758.41 earlier, the lowest level since February 24.
The dollar fell below 111.10 yen during Asian morning trade and dragged down exporter shares. Toyota Motor Corp shed 1.5 per cent, Honda Motor Co dropped 1.3 per cent and Tokyo Electron Ltd tumbled 2.3 per cent.
Analysts said that worries that the strong yen may erode exporters’ profits will likely continue to weigh on the market.
“Investors are concerned that Japanese companies are losing their ‘weak-yen appeal’,” said Kazuhiro Takahashi, equity strategist at Daiwa Securities.
“Many people are thinking it would be difficult for exporters to forecast on-year gains in their earnings for this fiscal year.”
On the other hand, Takahashi said that companies announcing shareholder returns may be bought as well as defensive shares, such as construction firms, which rely on domestic demand.
According to Nomura Securities, share buybacks exceeded ¥5 trillion in the last fiscal year ended March, marking a new record high, and will likely increase further in this fiscal year.
Fast Retailing tumbled 3.5 per cent and contributed a hefty 46 negative points to the Nikkei benchmark after it said that its Uniqlo clothing stores saw a 0.3 per cent fall on the year in the monthly same-store sales in March.
Inpex Corp stumbled 4.5 per cent and Japan Petroleum Exploration Co declined 2.3 per cent after crude oil prices fell in early Asian trading on signs of weakening gasoline demand.
The declines extended falls from the previous two sessions as investors doubted that producers will be able to rein in global overproduction that has seen crude prices tumble by as much as 70 per cent since mid-2014.
The broader Topix dropped 2.2 per cent to 1,274.76 and the JPX-Nikkei Index 400 shed 2.1 per cent to 11,496.77.