Japan's Nikkei slides on stronger yen amid intervention threat

By Kevin Buckland

TOKYO, Jan 26 (Reuters) - Japan's Nikkei share average slumped on Monday as a stronger yen broadly weighed on the market, with currency intervention worries further deterring equity buyers.

The yen traded as strong as 153.815 per dollar JPY=, a more than three-month peak, after what looked like a precursor to intervention sent Japan's currency spiking on Friday and catalysed further advances over the rest of the day.

A source told Reuters that the New York Federal Reserve conducted so-called "rate checks" on the dollar-yen pair that day, potentially signalling both that intervention was close and that it could be a joint action between U.S. and Japanese authorities.

A stronger yen reduces the value of offshore revenue for Japan's many heavyweight exporters.

The Nikkei .N225 closed down 1.8% at 52,885.25, with 193 of its 225 components under water, while 31 rose and one ended flat.

The broader Topix .TOPX dropped 2.1% to 3,552.49.

"The risk of intervention remains, and the outlook is unclear," said Maki Sawada, a strategist at Nomura Securities. "For both currencies and stocks, it's hard for traders to take positions in this environment."

An index of automotive shares .ITEQP.T tumbled 3.6%, the most among the Tokyo Stock Exchange's 33 industry groups.

Toyota Motor 7203.T slid 4.1% and Honda 7267.T slumped 4.4%.

The biggest weight on the Nikkei was AI-focused startup investor SoftBank Group 9984.T, which plunged 4.9%, shaving 164 points from the index.

At the opposite end, furniture retailer Nitori 9843.T, which benefits from a stronger yen because it imports much of what it sells, jumped 4.8%.