Tokyo shares open lower as stronger yen offsets Wall Street rebound

Tokyo shares open lower as stronger yen offsets Wall Street rebound

	Published : Wed, 21 Nov 2007 01:29 By : Agencies Print this Story

TOKYO (Thomson Financial) - Tokyo shares opened lower on Wednesday as a stronger yen offset the impact of a rebound on Wall Street overnight.

At 9.12 am (0012 GMT), the Nikkei 225 Stock Average was down 137.75 points or 0.9 percent at 15,073.77, after opening down 97.69 points or 0.6 percent at 15,113.83.

The broader Topix index was down 8.47 points or 0.6 percent at 1,460.80 after opening down 5.7 points or 0.4 percent at 1,463.57.

In early morning trade, the US dollar was trading mostly in the upper 109 yen zone, about half a yen lower than levels seen in Tokyo late yesterday.

On Wall Street Tuesday, the Federal Reserve significantly reduced its growth forecast for next year to 1.8-2.5 percent from the previous range of 2.5-2.75 percent, while nudging its inflation forecast lower and pointing to a slight rise in unemployment.

In minutes from its October 30-31 meeting, the Fed said the October rate cut was a 'close call' but at the same time 'most members saw substantial downside risks to the economic outlook and judged that a rate reduction at this meeting would provide valuable additional insurance against an unexpectedly severe weakening in economic activity.'

Meanwhile, worries about the credit crunch and the housing market continued to keep a lid on Wall Street's gains due to concerns about hefty losses at Freddie Mac and cash problems at Countrywide Financial Corp.

Freddie Mac, the second largest guarantor of home mortgages, yesterday announced a 2 billion US dollar quarterly loss as a result of the sinking housing market.

Countrywide Financial Corp fell after an analyst downgraded the stock citing a possible drying-up of liquidity, while Moody's predicted losses in the next two quarters for the country's largest lender.

The Dow Jones Industrial Average closed up 51.70 points or 0.40 percent at 13,010.14, after making 100-point swings in either direction throughout the day. The Nasdaq composite index rose 3.43 points or 0.13 percent to 2,596.81.

(1 US dollar = 109.73 yen)

masami.hachisu@thomson.com

hm/ng

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.