The Nikkei index ended below 20,000 for the first time in one month on Thursday as the yen strengthened against the U.S. dollar, further dampening investor sentiment already buffeted by concerns over the risk of a Greek default and an unclear outlook on U.S. monetary policy.
The 225-issue Nikkei Stock Average ended down 228.45 points, or 1.13 percent, from Wednesday at 19,990.82, a level not seen since May 18. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 17.04 points, or 1.04 percent, lower at 1,616.66.
Stocks opened lower and fell during the day in parallel with the yen’s strengthening against the dollar. The U.S. currency had already plummeted by about 1 yen overnight after officials at the two-day Federal Open Market Committee meeting that concluded Wednesday refrained from providing a clear start date for an initial hike of U.S. interest rates from near-zero levels.
U.S. stocks had gained slightly overnight as Fed members revised down their long-term interest rate outlook, with Chair Janet Yellen stressing the pace of rate normalization will be gradual, set to prolong a period of lower borrowing costs.
“But markets outside the United States seem to have picked up the message that the pace of U.S. recovery itself may be slower than recently anticipated,” said Hiroichi Nishi, assistant general manager of investment research at SMBC Nikko Securities Inc.
Concerns over Greece also kept investors wary amid speculation the country may be approaching its last chance to avoid defaulting on its debts and leaving the eurozone in disarray.