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Tokyo stocks close down 2.17%

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(Globalpost/GlobalPost)

Tokyo stocks closed 2.17 percent lower Wednesday as the dollar weakened against the yen on concerns over the US government shutdown.

The benchmark Nikkei 225 index lost 314.23 points to 14,170.49, while the Topix index of all first-section shares slipped 1.53 percent, or 18.28 points, to 1,175.16.

There were few fresh trading cues Wednesday but the US crisis dragged the dollar down against the yen, hitting exporter shares.

The greenback bought 97.65 yen in afternoon Asian trade against 97.94 yen in New York Tuesday and well off the 98.62 yen in Tokyo before the shutdown.

"The dollar is unlikely to rise until the US debt ceiling impasse is resolved," said Hiroyuki Fukunaga, CEO at Investrust.

The country's borrowing limit must be raised by mid-October or else the government will not be able to pay its bills and in turn default. However, there are fears that Republicans and Democrats on Capitol Hill will not be able to resolve their differences before then.

The Dow gained 0.41 percent on Tuesday while European markets also rose, with analysts saying investors had largely priced in the shutdown and were broadly hopeful of a quick solution to the standoff.

"What we can do is just to wait for the US government to resume operating," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

Analysts said there was little reaction to Japanese Prime Minister Shinzo Abe's announcement that he would hike the country's sales tax and offset it with government stimulus measures.

The decision followed months of uncertainty over whether Abe would push through the levy seen as crucial to shrinking a massive national debt.

"Buy incentives are all exhausted now that ... Abe's basic positions on taxes is clearer," one broker told Dow Jones Newswires.

Exporters fell, with Sony down 1.24 percent at 2,059 yen and Nintendo shedding 2.68 percent to 10,870 yen.

Nintendo, locked in a tough war with Sony and Microsoft for control of the videogames market, said it would stop making its Wii console for the Japanese market to focus its efforts on its successor, the Wii U.

Market heavyweight Fast Retailing, operator of the Uniqlo casual clothing chain, tumbled 4.17 percent to 35,550 yen.

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http://www.globalpost.com/dispatch/news/afp/131002/tokyo-stocks-close-down-217-0