TOKYO, Sept 4 (Reuters) - Japanese stocks slipped to seven-month lows, with the Nikkei posting its biggest weekly fall in almost a year and a half with speculators dumping futures while investors stayed risk-averse ahead of the release of a key U.S. jobs report later in the day.
The Nikkei lost 2.2 percent to close at 17,792.16, shedding 7 percent throughout its fourth straight week of declines, its largest weekly fall since April 2014.
The benchmark briefly touched 17,737.01, its lowest level since Feb. 10, with the yen’s gains souring already weak sentiment strained by concerns of a hard landing in China.
The dollar dropped to 119.10 yen in the afternoon, the lowest level since August 26, but gained slightly to 119.31 by the time Tokyo markets closed.
A bounce in the yen against the euro and dollar triggered a sell-off in futures, presumably from such investors as global macro funds.
“I believe the medium and long term trend of equities in Japan has already turned downward and we’re seeing lots of global investors reduce their exposure to Japanese equities,” said Makoto Kikuchi, chief executive of Myojo Asset Management.
“Foreign investors are selling futures in preparation for reducing their cash equities portfolios and changing their asset location dramatically.”
The selling in futures drove lower index-heavy stocks such as Fast Retailing Co, SoftBank Group and Fanuc Corp ; down 2.8 percent, 4 percent and 2 percent, respectively.
Exporters were mostly lower, with Toyota Motor Corp falling 2.5 percent and Panasonic Corp dropping 4 percent.
In the last week, net selling of Japanese cash and futures stocks by foreign investors hit a record high as they shunned riskier assets on worries that a China-led slowdown could hurt global growth.
The broader Topix dropped 2.1 percent to 1,444.53, losing 6.8 percent for the week. (Reporting by Joshua Hunt and Ayai Tomisawa; Editing by Shri Navaratnam)