Nikkei ends at 3-week low on yen strength

TOKYO, Dec 2 (Reuters) – Japan’s Nikkei index closed at its lowest in three weeks on Friday, led by declines in technology stocks, while the yen’s sharp gains hurt automakers.

Investors were also cautious ahead of key US monthly jobs data, which could offer cues on the Federal Reserve’s stance on interest rate hikes.

The Nikkei fell 1.59% to 27,777.90, its lowest close since Nov. 10, and posted a 1.59% weekly fall.

The Topix lost 1.64% to 1,953.98, after losing as much as 2.06%, a level that could trigger the Bank of Japan to step in the market. The index fell 1.64% for the week.

Japan’s shock win over Spain in the soccer World Cup overnight lifted shares of online broadcaster CyberAgent and British-style pub chain Hub.

CyberAgent — the social media and online ad company that is broadcasting all of the Qatar World Cup matches on its Ameba app — rose 3.95%, while Hub 3030.T jumped 7.03%.

“Many Japanese companies have their assumed dollar-yen rate set around 135, so additional yen strength has a very high probability of a becoming a drag on earnings,” Kazuo Kamitani, a strategist at Nomura, said in a conference call with journalists.

Investors globally will be closely watching Friday’s US non-farm payrolls for any further evidence of a peak in inflationary pressures to support Fed Chair Jerome Powell’s comments this week that it is time to slow rate hikes.

On the Nikkei, Mitsubishi Motors was the worst performer, sliding 5.91%. Nissan fell 2.98% and Toyota lost 1.38%.

The biggest drag was Uniqlo store operator Fast Retailing <9983.T), which shaved 48 points off the Nikkei with its 1.72% decline.

Mobile phone company KDDI lost 1.91%.

(Reporting by Kevin Buckland and Junko Fujita; Editing by William Mallard and Uttaresh.V)