TOKYO (Reuters) - Japanese stocks declined on Thursday, hurt by the dollar’s fall against the yen as the U.S. Federal Reserve signalled fewer future rate hikes than many expected and by Fast Retailing Co’s tumble on a media report.
The Nikkei shed 0.1 percent to 19,557.35 in midmorning trade.
It was mostly pulled down by index heavyweight Fast Retailing, hit by a Nikkei Business Daily report highlighting aggressive global expansion plans of the company’s global rivals.
Fast Retailing, the operator of Uniqlo clothing chain, tumbled 1.9 percent and contributed a hefty negative 27 points to the benchmark index.
Exporters were dented on a stronger yen, with Toyota Motor Corp falling 0.7 percent, Honda Motor Co dropping 1.0 percent and Panasonic Corp shedding 0.5 percent.
The dollar took a hit after the Fed ended its two-day policy meeting on Wednesday by increasing interest rates but stuck to its projections of three total rate hikes in 2017, instead of the four some expected.
The dollar, which went as high as 115.195 yen earlier this week, last stood at 113.36.
“The Fed was calm, sticking to what it said in its statement in December, but the market went too far expecting a more hawkish stance,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Banking and insurance stocks underperformed, with their sector indexes slipping 0.9 percent and 1.9 percent, respectively, after U.S. Treasury yields fell sharply in reaction to the Fed’s stance.
Mitsubishi UFJ Financial Group shed 1.0 percent, Sumitomo Mitsui Financial Group dropped 0.6 percent, Dai-ichi Life Holdings stumbled 3.5 percent, Sompo Holdings declined 1.6 percent and T&D Holdings 3 percent.
The broader Topix declined 0.2 percent to 1,568.15 and the JPX-Nikkei Index 400 shed 0.2 percent to 14,048.02.
Editing by Richard Borsuk