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Japan’s Nikkei tumbles as Uniqlo owner, BOJ speculation drag

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TOKYO — Japan’s Nikkei share average tumbled more than 1% on Friday, its first losing session in six, with more than two-thirds of the decline coming from Uniqlo owner Fast Retailing.

Japanese equities also came under pressure from the yen’s rise to a seven-month high, as traders bet the Bank of Japan could tweak policy further at a meeting next week, less than a month after a surprise widening of the 10-year Japanese government bond yield’s allowable range.

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The Nikkei shed 1.16% – or 306.41 points – to 26,143.41, as of the midday break.

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Fast Retailing slid 7.53%, shaving 205.72 points off the Nikkei, after announcing disappointing financial results on Thursday after markets closed.

The broader Topix, by contrast, was down by a much more modest 0.16% at 1,905.15.

The Nikkei remains on course for a weekly gain, up 0.65%, having fallen for four straight weeks.

The Topix is headed for a 1.57% weekly rise, also its first winning week in five.

Exporters dropped as a stronger yen cut the value of overseas revenue. Toyota lost 1.97%, while Nintendo fell 0.86%.

Precision machinery fell 1.78% and was the biggest loser among the Tokyo Stock Exchange’s 33 industry groups, followed by a 1.59% drop for transport equipment .

The yen touched its strongest level to the dollar since June 1 at 128.65. The 10-year Japanese government bond yield topped the new 0.5% policy ceiling for the first time on Friday, rising as high as 0.545%.

Financial stocks benefited from the speculation, with the TSE’s banking subindex jumping 3.54%.

“Nobody is sure what will happen at next week’s Bank of Japan meeting, and there may be some disappointment,” said Kenji Abe, a strategist at Daiwa.

“I don’t think they will reach a concrete decision, so yen appreciation can be reversed and the declines in the Nikkei can be reversed.” (Reporting by Kevin Buckland; Editing by Eileen Soreng)

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