Tokyo stocks slipped Friday, led by banking issues following a news reports that a major Japanese bank may book a group net loss this fiscal year to cover bad debts. The U.S. dollar was higher against the Japanese yen and the euro.
The benchmark Nikkei Stock Average of 225 selected issues lost 28.95 points, or 0.25 percent, to close at 11,360.40 points. The index lost 17.79 points, or 0.16 percent, Thursday.
The dollar was trading at 104.50 yen by late afternoon Friday, up 0.36 yen from late Thursday in Tokyo and also above the 104.45 yen it bought in New York later Thursday. The dollar traded between 104.39 yen and 104.62 yen in Tokyo.
On the stock market, the Nikkei index ended lower after the mass-circulation Yomiuri newspaper said in its Friday evening editions that Sumitomo Mitsui Financial Group Inc. may suffer a group net loss in the current fiscal year ending March 31 to cover bad loan write-offs.
Sumitomo posted a denial on its Web site, but its shares fell 1.7 percent and other bank shares also fell on investors' concerns that they may face similar problems. UFJ Holdings Inc. lost 3.5 percent and Mizuho Financial Group Inc. lost 1.4 percent.
"With all these bank shares falling and affecting the (Nikkei) index, it's hard to buy a large number of key shares," said Yutaka Miura, general manager of Shinko Securities' equity information division.
Japanese regulators have asked the nation's banks to solve their bad debt problems, which ballooned over more than a decade-long slowdown.
Investors were also reluctant to buy high-tech shares as the recent slew of October-December quarter earnings results from Japan's technology companies have shown how much they have suffered from the fall in prices of digital gadgets and electronic components such as semiconductors.
Technology issues including Advantest Corp., Canon Inc. and Tokyo Electron Ltd. lost ground Friday.
The broader TOPIX index of all issues on the Tokyo Stock Exchange's first section lost 4.00 points, or 0.35 percent, to 1,145.51 points. The index shed 2.46 points, or 0.21 percent, on Thursday.
First-section volume fell to 1.817 billion shares, from Thursday's 1.897 billion shares. Decliners beat advancers 966 to 500, while 138 issues remained unchanged.
In currency trading, the dollar edged higher against the yen and the euro in Asia Friday as traders covered short positions on the view that U.S. jobs data for January due later today may be strong, brightening the dollar's near-term outlook.
Traders said the growing view that Group of Seven finance officials meeting this weekend in London will stick to their current foreign exchange policy stance and won't make explicit calls for stronger Asian currencies also supported the American currency against the yen.
The euro fell to $1.2968 late Friday afternoon in Tokyo from $1.3025 late Thursday and to 135.50 yen from 135.64 yen.
The yield on Japan's benchmark 10-year government bond rose to 1.3250 percent, from Thursday's finish of 1.3200 percent. Its price fell 0.04 to 99.78 points.