TOKYO, June 27 (Xinhua) -- The Nikkei stock index fell 1.39 percent Friday as poor U.S. economic data and a strong yen soured the market mood ahead of the weekend.
The Nikkei 225 index fell 213.49 points to finish at 15,095.00, marking a 10-day losing low, while the broader Topix index of all first-section issues lost 10.28 points, or 0.81 percent, to close at 1,253.15.
Analysts here pointed to figures from the U.S. Commerce Department showing that consumer spending, which accounts for two- thirds of U.S. economic activity, had only increased 0.2 percent in May, as dampening the market mood here Friday, and saw a broad range of issues sold from the offset.
The latest figure was below median economists forecast for a 0. 4 percent increase, and analysts here said the figures were likely due to weak healthcare spending and could lead to economists reevaluating and downgrading their second-quarter growth forecasts for the world's largest economy.
"Until now, the expectation had been that U.S. consumption increases, which helps Japanese exports to grow. We can't expect that now. It's negative for Japanese shares," said Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo.
Some strategists here also noted that a few jitters were starting to emerge following the market overheating here and concerns the U.S. Federal Reserve will raise its interest rates earlier than anticipated, although some analysts said the world's largest economy is not strong enough yet for an interest rate hike.
"The U.S. economic recovery is proceeding slower than most people had foreseen, and it will probably take longer for the Fed to ratchet up interest rates as a result," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Market players said that selling increased in the afternoon session as the U.S. dollar fell to 101.40 yen in Tokyo afternoon trade, compared to 101.70 yen logged in New York Thursday afternoon.
A strong yen typically dents the profits of export-related firms when the funds are repatriated, as well as their earnings outlooks. Unfavorable currency exchange rates can also affect exporters' competitiveness in overseas markets.
Subsequently, consumer electronics behemoth Sony lost 1.40 percent to 1,679 yen, while Canon, the world's largest camera maker, retreated 1.88 percent to close at 3,277 yen.
Mitsubishi Motors skidded down 0.35 percent at 1,121, reversing early gains, following a report in the Nikkei economic daily saying the automaker would begin supplying Fiat Chrysler Automobiles with sedans for sale in markets in other parts of Asia, later this year.
Heavily weighted Nikkei components also came under pressure on the last trading day of the week, and Fast Retailing, operator of the Uniqlo chain of apparel stores, dropped 2.8 percent to 33,635 yen and mobile service and communications firm Softbank lost 0.6 percent to finish at 7,559 yen.
Oil seal manufacturer NOK Corp. relinquished 2 percent to 1,990 yen, marking its steepest drop since May 7, after Merrill Lynch reduced its rating on the firm's stock to "neutral" and set its target price at 2,100 yen.
Ono Pharmaceutical was one bright spot on the market, however, jumping 5 percent to 8,980 yen, following local media reports saying Japan's health ministry will approve the firm's new drug for the treatment of melanoma, with the product possibly being available to patients at the end of this year.
Trading volume on Friday rose to 2.51 billion shares on the Tokyo Exchange's First Section, up from Thursday's 1.98 billion shares, with declining issues outnumbering advancing ones by 1,335 to 377.