ASIA MARKETS: Japan Stocks Tumble On Yen Strength Before G-20

By Sarah Turner and V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Japanese stocks fell sharply Friday to return most of the gains recorded earlier in the week as the yen strengthened ahead of a meeting of the world's top finance ministers.

The Nikkei Stock Average dropped 1.2% to 11,173.83.

The decline came as cautious investors looked ahead to a meeting of finance ministers and central bankers from the Group of 20 nations, amid expectations that the yen's steep fall over the last few weeks may be in focus at the meeting.

"Japan continues to grab headlines in Asia with plenty of yen positioning ahead of the G20 meetings. The Nikkei has lost ground as the yen appreciates, heading into the meeting," said IG Markets strategist Stan Shamu.

Despite the sharp fall on Friday, the Nikkei finished the week 0.2% higher, marking its 13th advance in the last 14 weeks.

The dollar (USDJPY) slipped as low as 92.22 yen during the session in Asia, from around Yen92.85 late Thursday in North America, after spending much of the week above Yen93.

A strengthened yen affects the global competitiveness of Japanese products, and often tends to hurt stocks of companies reliant on overseas demand.

Several currency-sensitive stocks lost ground, with Toyota Motor Corp. (>> TOYOTA MOTOR CORPORATION) sliding 1.9% and Subaru maker Fuji Heavy Industries Ltd. (>> Fuji Heavy Industries Ltd.) off 1.7%, while Panasonic Corp. (>> Panasonic Corporation) shed 0.9%.

Shares of Sony Corp. (>> SONY CORPORATION) fell 1.9%.

U.S. videogame-console and software sales dropped in January, according to NPD Group, and Sony is widely expected to unveil its new gaming console at an event Feb. 20.

Other movers

The market moves were more modest elsewhere in Asia, with South Korea's Kospi and Hong Kong's Hang Seng Index each gaining 0.1%, while Australia's S&P/ASX 200 slipped 0.1%.

The Kospi ended the week 1.6% higher, and was followed by a 1.3% gain for the S&P/ASX 200 and a 1% rise for the Hang Seng Index.

Mainland Chinese and Taiwanese markets, which remained closed for a holiday, are set to reopen on Monday.

Downbeat earnings reports contributed to the losses in Tokyo and Sydney.

Japanese steel giant Nippon Steel & Sumitomo Metal Corp. (>> Nippon Steel & Sumitomo Metal Corp) fell 2% after it released a weaker-than-expected earnings forecast for its fiscal year on Thursday.

Kirin Holdings Co. (>> Kirin Holdings Company, Limited.) fell 4.9% after the Japanese brewer said its 2013 pretax profit will likely fall 5% on sales promotion costs, according to a Nikkei news report.

Also trending lower after its earnings report, Trend Micro Inc. (>> Trend Micro Incorporated) lost 6.1%.

Meanwhile, Australia & New Zealand Banking Group Ltd. (>> Australia and New Zealand Banking Group) declined 1% in Sydney after the banking major reported a 20% drop in first-quarter net profit amid soft economic conditions.

Miners also fared poorly, led by Rio Tinto Ltd. (>> Rio Tinto plc). Rio's shares dropped 2.7% after the mining giant Thursday reported its first fiscal-year loss.

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