Japan Stocks Drop, Taking Cues From Weaker Dollar

Japanese stocks wove a web of losses in early Tuesday trading, with the yen again at the center of it all, sending the Nikkei Average down 0.8% after ending little changed the previous day. The broader Topix likewise weakened 0.7%. The moves came as a report that U.S. President Barack Obama had talked down the dollar at the Group of Seven meeting in Germany hit the greenback in overnight forex trade. Although Obama denied the comments, the dollar managed to fall by a full yen to �124.66, losing hold of the �125 handle. This, in turn, removed support from the blue-chip exporters -- among the decliners were Sony Corp. (down 1.3%), Panasonic Corp. (down 1.5%), Sharp Corp. (down 1.2%), Fanuc Corp. (down 1.1%), Nissan Motor Co. (down 1.4%) and Honda Motor Co. (down 0.9%). Kawasaki Heavy Industries Ltd. traded 0.3% lower, slightly outperforming the market as a Nikkei report said it was forming a joint venture with a Chinese conveyor maker as part of a push to sell robots in the country. On the upside, Dentsu Inc. rose 0.5%, paring a 3.7% loss in the previous session when the market reacted to the advertising agency's revenue numbers. Similarly, Kyushu Electric Power Co. climbed 1.2%, whittling away at its 3.1% drop Monday following a Sankei Shimbun report that the company would need to make further checks before being allowed to reopen its Sendai nuclear power plant.