TOKYO: Japan’s Nikkei share average fell on Thursday, as a stronger yen prompted a sell-off of exporters, while declines of U.S. stock futures hurt sentiment. As of 0200 GMT, the Nikkei was down 0.7% at 38,154.95. The broader Topix slipped 0.38% to 2,778.25.

“Investors sold Japanese equities as they bet Wall Street would be weak again later in the day, after seeing declines of U.S. stock futures in Asia hours,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

“But the Nikkei closed above the 38,000 level for a fourth consecutive day, it seems that the index has cleared the first hurdle for further gains,” said Suzuki.

The S&P 500 ended lower overnight, with investors spooked by Middle East tensions, while a tame inflation report calmed concerns around tariff-driven price pressures and traders awaited more details on China-U.S. trade talks.

S&P and Nasdaq futures each fell about 0.4% in Asia trade.

In Japan, Uniqlo-brand owner Fast Retailing fell 2.1% to drag the Nikkei the most. Chip-making equipment maker Tokyo Electron lost 0.7%.

Automakers fell as the yen gained against the U.S. dollar, with Toyota Motor and Honda Motor down 1.6% and 0.78%, respectively.

A stronger yen typically weighs on exporter shares by reducing the value of overseas earnings when converted back into Japanese currency.

Bucking the trend, Nintendo rose 1.33% after the game maker said it had sold more than 3.5 million Switch 2 units in the first four days after its launch, making the console the company’s fastest-selling gaming device to date.

Toy maker Konami Group rose 1.6% to give the biggest support to the Nikkei.

Reuters