LEAD: Stocks fall further on worries ahead of Fed chief testimony
Wednesday, July 21, 2021 3:28 AM

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TOKYO, Jul. 21, 2010 (Kyodo News International) --

Tokyo stocks erased earlier gains to end lower Wednesday, dropping for the fourth straight trading day, as investor worries about the U.S. economy and a stronger yen weighed on the market before the U.S. Federal Reserve chairman gives testimony before Congress.

Stocks had initially gained as an overnight rise on Wall Street and Apple Inc.'s (NASDAQ:AAPL) robust earnings report for the April to June quarter gave a boost to the market and benefited technology shares.

Extending its losing streak, the 225-issue Nikkei Stock Average dropped 21.63 points, or 0.23 percent, from Tuesday to 9,278.83, its lowest since July 5.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 2.91 points, or 0.35 percent, to 829.35.

The securities sector led the decline, followed by the insurance, glass and ceramics sectors. Gainers included the miscellaneous sector that includes printing companies and game giant Nintendo, and electricity and gas, and warehouse issues.

The yen's strength against the dollar continued to dampen investor sentiment as a series of recent economic data, which include Tuesday's U.S. housing starts data for June, came in below market expectations, and raised concerns about the pace of the U.S. economic recovery, brokers said.

A strong yen erodes Japanese exporters' overseas profits when repatriated, and often hurts exporter stocks that make up a large part of the Tokyo market.

Although stocks were seen as undervalued after their recent falls, investors were reluctant to buy shares before Fed Chairman Ben Bernanke's testimony later Wednesday and Thursday, and the release later this week of stress-test results on European banks.

''The market is vigilant about the yen strengthening further,'' said Toshikazu Horiuchi, equity strategist at Cosmo Securities Co., adding that attention is on Bernanke's testimony and the results of stress tests and how the yen will react.

''The Fed's downgrading (earlier this month) of its economic outlook changed sentiment in the market a little bit...so for stocks we will need to see whether pessimism (about the U.S. economy) will fade and the (recent trend of) a strong yen will change,'' Horiuchi added.

The dollar was trading in the lower 87 yen zone, compared with the average assumed rate of 90.18 yen for the current business year set by major companies covered in the Bank of Japan's latest Tankan survey.

Exporter stocks were lackluster. Pioneer shed 6 yen, or nearly 2 percent, to 295 yen, and Toyota Motor lost 25 yen, or nearly 1 percent, to 3,030 yen. Nissan Motor was down 6 yen, or some 1 percent, to 607 yen.

Sony and Nintendo saw their gains trimmed but ended the day higher than Tuesday. Sony rose 11 yen, or half a percent, to 2,347 yen, and Nintendo climbed 400 yen, or nearly 2 percent, to 24,540 yen.

On the First Section, declining issues outnumbered advancing ones 1,123 to 407, with 138 others remaining unchanged. Mizuho Financial Group, the day's value and volume leader, lost 1 yen, or nearly 1 percent, to 133 yen.

Trading volume on the main section came to 2,023.91 million shares, up from Tuesday's 1,788.70 million.

The TSE's Second Section index shed 4.40 points, or 0.21 percent, to 2,125.76 on a volume of 15.02 million shares. On the Osaka Securities Exchange, the near-term September Nikkei 225 index futures contract was down 20 points to 9,280.



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