Tokyo stocks down 1.72% by break
Tokyo stocks fell 1.72% today morning as the dollar dropped sharply against the yen on concerns over the budgetary impasse in Washington.
The benchmark Nikkei 225 index was down 254.34 points to 14,505.73 by the break, while the Topix index of all first-section shares declined 1.74%, or 21.18 points, to 1,196.34.
Financial markets were weighed down as the US government was on the brink of shutting down yesterday after The House of Representatives approved a Republican bill seeking to delay President Barack Obama’s health care law.
An extended government shutdown rekindles memories of 2011 when similar political infighting resulted in the loss of the US triple-A credit rating and was seen as the primary driver of the stock market’s last full-blown correction, traders said.
“Things are far from the ‘panic stage’, but they don’t have to be for investors to be spooked by the apparent intractability of the US political deadlock,” said Tachibana Securities market analyst Kenichi Hirano.
“The Nikkei should see some technical support at 14,500, but with US and Japanese equities looking overbought, Japan shares are susceptible to both investor aversion to stocks and dollar weakness.”
In forex trading, the dollar fell to 97.87 yen (RM3.2580) in morning Asian trade from 98.24 yen in New York Friday afternoon.
“The currency market reflects the lack of faith in US politicians to get anything constructive done,” a Japanese market analyst told Dow Jones Newswires.
A stronger yen is a negative for shares of Japanese exporters as it shrinks the value of their repatriated foreign income.
Shares of automakers fell, with Toyota down 2.48% to 6,280 yen and Honda falling 2.47% to 3,745 yen.
Currency markets appeared unfazed by data showing that Japan’s industrial production fell by a worse-than-expected 0.7% on month in August.
The Dow Jones Industrial Average shed 0.46% to 15,258.24 on Friday. – AFP, September 30, 2013.
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