Japanese stocks fell after the yen strengthened and oil prices dropped to a five-year low, weighing on exporters and energy shares.
The Topix index declined 0.7 percent to 1,437.40 as of 9:03 a.m. in Tokyo, falling from a seven-year high and headed for its first loss in December. The Nikkei 225 Stock Average lost 0.7 percent to 17,810.31. The yen traded at 120.73 per dollar after rallying 0.6 percent yesterday, the most since Oct. 15.
The yen has weakened 13 percent against the dollar this year, with losses extending after the Bank of Japan boosted stimulus measures on Oct. 31. In contrast, the Federal Reserve ended its third round of bond purchases in October amid a mounting recovery in the worlds largest economy.
A report yesterday showed Japan is in a deeper recession than initially estimated, with the economy shrinking an annualized 1.9 percent in the third quarter, more than the 1.6 percent drop estimated last month.