Yen keeps Japanese exporters under pressure

Japanese stocks suffered a sharp retreat as the renewed strength of the yen weighed on leading exporters, eroding the tentative mood of confidence seen last week.

The Nikkei 225 Average fell 2.2 per cent to 9,024.60 on Wednesday as it headed back towards a 16-month low beneath 9,000 struck a week ago. The broader Topix index shed 1.7 per cent to 820.99.

Exporters' shares fell as the yen struck a fresh 15-year high against the dollar. Toyota Motor, which makes about two-thirds of its sales abroad, fell 2.1 per cent to Y2,875, Honda dropped 2.5 per cent to Y2,744 and Canon lost 2.1 percent to Y3,510.

Unicharm fell 3.2 per cent to Y9,470 yen after the personal healthcare group said it would raise up to Y80.5bn through an issue of euroyen convertible bonds, triggering dilution concerns.

The mood was similarly downbeat elsewhere in the region.

Hong Kong broke a five-day run of gains as China Mobile sank 3.8 per cent to HK$78.90 after Vodafone sold a 3.2 per cent stake in the company for $6.5bn - almost double the amount it paid for the holding. Other telecoms stocks fell in tandem, with China Unicom shedding 4.2 per cent to HK$11.10.

The Hang Seng index lost 1.5 per cent to 21,088.86, while in Shanghai, the Composite index eased 0.1 per cent to 2,695.29 amid worries about further government curbs on the property market.

Poly Real Estatelost 2.8 per cent to Rmb11.80 while China Vanke fell 2.4 per cent to Rmb8.57.

Financials also lost ground, with Industrial Bank of Chinadown 3.6 per cent to Rmb25.31 and Merchants Bank 2 per cent lower at Rmb13.56.

Those losses offset gains for metals producers amid speculation that the government will limit production to meet energy-saving goals.Jiangxi Copperleapt 7.1 per cent to Rmb34.39 while Chalco added 2.2 per cent to Rmb10.70.

In Australia, Foster'swas in focus as the brewing group rejected an offer for its wine arm - triggering hopes of a bidding war for the unit.

Foster's shares rose as much as 6 per cent before easing back to end 4.5 per cent higher at A$6.34, the highest since January 2008.

But the broader market lost ground as mining stocks continued to suffer from worries about a supertax on the sector and doubts about the global economic recovery.

BHP Billitonfell 1.4 per cent to A$37.91 and Rio Tinto lost 1.2 per cent to A$73.44 as the S&P/ASX 200 index eased 0.8 per cent to 4,537.16.

Technology stocks led the lower in Taipei, although some strategists suggested the outlook for the market could brighten as relations with mainland China improve following teh signing of a free-trade agreement between the two last month.

The weighted index slipped 0.4 per cent to 7,851.31, with Taiwan Semiconductor Manufacturing down 1.5 per cent at T$59.30.

But Chinese shipbuilder Yangzijiang's Taiwan Depositary Recepits made a strong debut, rising the daily 7 per cent limit to T$20.10.

In Seoul, the Kospi eased 0.5 per cent to 1,779.22, as memory chip makers retreated after a warning from Samsung Electronicsof an oversupply in the market. Samsung shares fell 2.2 per cent to Won771,000 while Hynix Semiconductor shed 3.5 per cent to Won20.750.

In Singapore, the Straits Times index eased 0.8 per cent to 3,011.42, although Manila bucked the trend as the composite index rose 3,804.73.

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