Nikkei Weighed Down by Strong Yen; Asia Mixed – CNBC.com

Nikkei Near Bear Market

The index touched a seven-week low at 13,060 in early trade with exporter stocks amid the biggest laggards as any strength in the yen hurts the value of their repatriated earnings. Toyota Motor, Komatsu and Sony skidded over 4 percent each.

The index is now in full correction mode, having lost over 16 percent from its five-and-a-half-year peak of 15,627 on May 22. This leads some experts to say the index could be in the grips of a “June swoon’ as it approaches bear market territory.

The Nikkei’s Relative Strength Index (RSI) currently stands at 37 from the 82 hit at the end of May. A reading under 30 indicates that stocks are oversold.

If the index falls below 12,500, it would have lost 20 percent from its peak and will have entered a bear market as well as ‘pre-Kuroda’ levels, a reference to where the Nikkei traded just before Bank of Japan Governor Haruhiko Kuroda unveiled an aggressive monetary policy to revive Japan’s economy in early April.

Australia Hits Lows

Australia’s benchmark index fell below 4,880 to trade at its lowest levels since February as caution set in ahead of a Reserve Bank of Australia (RBA) policy meeting.

Ahead of the meeting, the Australian dollar rallied to a near two-week high against the greenback in early Asian trade. The currency jumped 2 percent to $0.9792, well above last week’s low of $0.9528.

The central bank cut rates by 25 basis points to 2.75 percent last month and most analysts are not expecting a June rate cut. The rebound in the Australian dollar, however, means the rate decision could be a close one.

(Read More: Will Australia Deliver Another Rate Cut?)

Shares of surf-wear retailer Billabong plummeted 56 percent after stating that it has ended takeover talks with two potential suitors and downgraded its full-year profit guidance.

Kospi Flat

Strength in the yen lent support to major exporters. Kia Motors rallied 1 percent while SK Innovation jumped nearly 2 percent.

However, tech blue-chip stocks were unable to benefit with LG Electronics and LG Display down 1 percent each.

— By CNBC.com’s Nyshka Chandran. Follow her on Twitter @NyshkaCNBC