Summary However, the two reversed course Tuesday with a drop in oil prices also hitting confidence
TOKYO (AFP) - Tokyo shares dropped on Tuesday morning as a rally in the yen and another fall in oil prices dented sentiment ahead of closely watched US and Japanese central bank meetings.
Japanese equities opened lower, tracking a negative lead from Wall Street where the main indexes moved off last week s record highs on profit-taking and a drop in crude prices.
The Bank of Japan is widely considered to be lining up more easing measures, expectations of which have sent the yen tumbling and the Nikkei index soaring this month.
However, the two reversed course Tuesday with a drop in oil prices also hitting confidence.
The benchmark Nikkei 225 index slumped 1.55 percent, or 257.41 points, to end the morning session at 16,362.88, extending two straight days of declines.
The broader Topix index of all first-section shares fell 1.54 percent, or 20.38 points, to 1,304.98.
Exporters were hit as the dollar sank to 104.81 yen from 105.82 yen in New York. It is also well off the 106.11 yen seen in Tokyo earlier Monday.
The yen is seen as a safe haven in times of uncertainty, but a stronger unit outlook for exporters profitability.
"A stronger yen and cheaper oil prices are likely to damp investor sentiment," Toshihiko Matsuno, a senior strategist with SMBC Friend Securities, told Bloomberg News.
"Investors are likely to zone in on individual stocks as their respective earnings reports come out."
With the earnings season about to get under way, firms reporting this week include Canon, Nintendo, Nissan, SoftBank, Sony and Japan Airlines.
Toyota shed 1.36 percent to 5,766 yen and factory robot maker Fanuc was off 1.44 percent at 17,360 yen.
Financial stocks were also hit, with banking giant Mitsubishi UFJ Financial Group down 3.14 percent at 492.9 yen and Sumitomo Mitsui Financial Group falling 2.32 percent to 3,102 yen.
Nintendo lost another 2.15 percent to 22,720 yen following the previous day s near 18 percent plunge that came in response to a warning that Pokemon Go s success would not translate into bumper profits.
Energy explorer Inpex tanked 3.90 percent to 796.7 yen and refiner JX Holdings lost 2.59 percent to 382.4 yen on the drop in oil prices.
Mobile giant SoftBank bucked the downtrend, jumping 3.62 percent to 5,405 yen after shares of its US wireless carrier Sprint soared on a report of a big jump in monthly subscribers.
