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| Japanese stocks fall on profit taking | Japanese stocks fall on profit taking |
| (35 minutes later) | |
| Japan's main stock index, the Nikkei 225, fell as much as 2.6% on Monday - the first trading day of the new year, as investors booked profits. | Japan's main stock index, the Nikkei 225, fell as much as 2.6% on Monday - the first trading day of the new year, as investors booked profits. |
| Japanese shares have surged over the past year, with the Nikkei 225 index gaining 57% in 2013. | |
| The surge has been prompted by a series of aggressive policies unveiled by the government to revive Japan's economy. | The surge has been prompted by a series of aggressive policies unveiled by the government to revive Japan's economy. |
| The steps have seen a sharp decline in the yen's value, helping lift exports and boost profits of leading exporters. | The steps have seen a sharp decline in the yen's value, helping lift exports and boost profits of leading exporters. |
| The yen hit a five-year low against the US dollar on Friday - but recovered slightly in early Asian trade on Monday. | The yen hit a five-year low against the US dollar on Friday - but recovered slightly in early Asian trade on Monday. |
| Analysts said the recovery in the yen had also prompted the sell-off in Japanese shares. | Analysts said the recovery in the yen had also prompted the sell-off in Japanese shares. |
| "Tokyo stocks are overbought, and a break in the yen's fall, plus weaker futures are sure to result in some long-needed profit-taking after the December run-up," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities. | |
| Further jump? | |
| Japan's economy, the world's third-largest, has been stagnant for nearly two decades. | |
| In an attempt to revive growth, Japan's policymakers have unveiled a series of moves including doubling the country's money supply. | |
| The moves have seen the yen weaken more than 20% against the US dollar since January last year. | |
| A weaker yen makes Japanese goods more affordable for foreign buyers and boosts profits of exporters when they repatriate their foreign earnings back home. | |
| A weak currency, coupled with signs of a recovery in the Japanese economy, has helped boost investor sentiment and lifted Japanese stocks. | |
| Analysts said that Japan's central bank, the Bank of Japan, was likely to continue to take further steps to help sustain the recovery - which would help boost stocks further in the coming months. | |
| "We know there is more to come from the Bank of Japan," Richard Jerram, chief economist at Bank of Singapore, told the BBC. | |
| "The yen is going to keep going down and as we saw last year, it's a fairly simple dynamic. It boosts the corporate sector, boosts profits and the stock market." | |
| Mr Jerram said that Japan's main stock index could rise between 15% to 20% in the current year. |