TOKYO (AP) - Tokyo's main stock index finished lower Thursday after the government reported weaker-than-expected Japanese economic data.
The U.S. dollar was lower against the Japanese yen and the euro.
The Nikkei Stock Average of 225 selected issues lost 101.78 points, or 0.85 percent, to close at 11,864.91 points.
The index gained 79.78 points, or 0.67 percent, on Wednesday.
The dollar was trading at 104.11 yen at 3 p.m. (0600 GMT) Thursday, down 0.51 yen from late Wednesday in Tokyo but above the 103.93 yen it bought in New York later that day.
On the stock market, the Nikkei index started Thursday's trading lower following Wall Street's overnight retreat and the dollar's slide against the yen and the euro.
A stronger yen tends to make Japanese exports less competitive and more expensive abroad and lowers the value of companies' repatriated profits.
The index's losses widened in afternoon trading after the government said Japan's core machinery orders fell 2.2 percent in January from a month earlier, marking the second straight month of decline.
Economists surveyed by Dow Jones Newswires had estimated a 3.0 increase on average.
The weaker-than-expected data gave investors renewed uncertainty about an economic recovery in Japan.
Machinery orders are widely regarded as a leading indicator of corporate capital investment.
Core orders exclude those from electric power companies and those for ships, which are often a source of volatility in the overall data because of their large sizes.
In New York on Wednesday, the Dow Jones industrial average closed down 107.00 points, or 0.98 percent, at 10,805.62, and the Nasdaq composite index fell 12.26 points, or 0.59 percent, to 2,061.29.
The April crude contract at the New York Mercantile Exchange rose to US$55.65 a barrel - just short of the all-time high of US$55.67 set last October - due to supply concerns.
In Tokyo, the broader TOPIX, which includes all issues on the Tokyo Stock Exchange's first section, shed 5.20 points, or 0.43 percent, to finish Thursday's trading at 1,195.43 points.
The TOPIX rose 5.24 points, or 0.44 percent, the day before.
In currencies, the dollar remained weaker after falling against the euro and the yen Wednesday in New York because of higher oil prices, a sell-off in Treasurys and nervousness over U.S. trade figures slated for release Friday.
The dollar was also under pressure following vague remarks Thursday by Japanese Prime Minister Junichiro Koizumi about Japan's need to invest in various currencies. Japan has the world's largest foreign exchange reserves, with most of its holdings in U.S. Treasury bonds.
"Koizumi's comments were very, very bearish for the dollar,'' said Katsuhiro Kaneko, senior foreign exchange manager at Mitsubishi Securities.
Soon after Koizumi's speech, however, an official at Japan's Ministry of Finance told Dow Jones Newswires that Tokyo has no intention of shifting the currency makeup of its reserves, and that the prime minister was likely referring to diversification within Japan's dollar-denominated assets.
The euro rose to US$1.3425 Thursday afternoon in Tokyo from US$1.3350 late Wednesday.
Against the Japanese currency, the euro rose to 139.76 yen from 139.75 yen.
The yield on Japan's benchmark 10-year government bond fell to 1.4700 percent from Wednesday's finish of 1.4900 percent.
Its price rose 0.18 point to 100.26 points. - AP