Big companies across all industries plan to cut capital expenditure by 0.9 percent this fiscal year, more than the median economist estimate of 0.7 percent.

Large manufacturers based their plans on an assumption that the yen will average 117.46 per dollar over the next 12 months, a level more than 5 yen weaker than its rate Friday.

“The data has worsened overall, regardless of industry sector and company size,” Koya Miyamae, an economist at SMBC Nikko Securities in Tokyo, wrote in a note. “There’s especially an indeterminate sense of concern for the outlook." 

Strategists are turning cautious after the best month for the Topix since October helped pare the first quarter’s losses.

The Japanese benchmark started 2016 by tumbling into a bear market as global shares plunged, and has been lagging its peers amid the global recovery. The Japanese gauge is the second-worst performing developed market this year, as the yen has weighed on exporters’ earnings prospects.

Eoin Treacy's view

The Dollar broke downwards against the Yen in January and encountered resistance in the region of the trend mean a few weeks later. Since the weakness of the Yen was one of the platforms on which the bullish case for Japanese equities was predicated this represents a headwind for investors. A sustained move above the trend mean would be required to begin to suggest a return to Dollar dominance. 

It is open to question whether today’s 6.0 Tokyo earthquake had an influence on the size of the pullback in Japanese stocks. Addressing the chart facts; a progression of lower rally highs has been evident on the Nikkei-225 since June. The rally from the February low had unwound most of its oversold condition relative to the trend mean and the Index will need to find support above 15,000 during this pullback if the support building hypothesis is to remain credible.