14 December 2005, 11:35  Tokyo shares close lower on Tankan manufacturer concerns, strong yen

Share prices closed lower, with the benchmark Nikkei index falling for the first time in four days, as players reacted with disappointment to the weaker-than-expected diffusion index for large manufacturers in the December Tankan survey even as other parts of the poll painted an upbeat picture of corporate sentiment, dealers said. A sharp rise in the yen also weighed on the market, since any strengthening in the local currency against the dollar tends to undermine the competitiveness of Japanese exporters. The US unit has come under pressure as market players anticipate a near term end to the Federal Reserve's cycle of rate hikes following last night's 25 basis points rise in the key fed funds target rate. The dollar, fell to a month low against the yen during the local session, before finishing at 118.71 yen. Thе Nikkei 225 Stock Average closed down 314.28 points, or 2.0 pct at 15,464.58, but off the day's low of 15,447.15. The broader-based TOPIX index of all First Section shares fell 23.94 points or 1.5 pct to close at 1,602.21, off a low of 1,598.03. Decliners beat gainers 370 to 1,231, with 65 issues unchanged. Volme fell to 3.52 bln shares from 3.67 bln shares yesterday. In the December Tankan, the headline diffusion index for big manufacturers rose to plus 21 from plus 19 in the September survey, but was still below the market consensus estimate of plus 23. The mixed Tankan report as well as the yen's surge were used as an excuse for investors to cash in some of the recent heady gains, that have seen prices becoming technically overstretched. "At last, the market is adjusting itself. Participants have bee feeling that it has become overheated," said Hideyuki Suzuki, a strategist at SBI Securities.

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