Tokyo Stocks Down at Break

   •    12 April 2017 10:41 WIB
stock market (en)
Tokyo Stocks Down at Break
Tokyo Stocks Down at Break (Photo: AFP)., Tokyo: Tokyo stocks fell Wednesday morning as the yen shot to five-month highs against the dollar over fears about growing tensions in the Middle East and on the Korean peninsula.
Traders were subdued as they watched developments following last week's US strike on Syria and intensifying sabre-rattling by the United States and North Korea. Nervous investors often plough into the yen at times of instability as it is seen as a safe haven during global instability.
The dollar was trading below 110 yen for the first time since November, changing hands at 109.50 yen Wednesday morning against 109.65 yen in New York on Tuesday afternoon and 110.66 yen in Tokyo earlier.
A strong yen is negative for Japanese exporters as it erodes their profitability and often drags the stock market lower.
"It is possible that the yen will remain strong for a while due to rising geopolitical risks, which would dampen appetite for dip buying," Okasan Online Securities said in a commentary.
"The stronger yen is having a negative effect across the board in Tokyo stocks trading," it said.
The benchmark Nikkei 225 index lost 1.24 percent, or 231.83 points, to sit at 18,516.04 by the lunch break, while the Topix index of all first-section issues fell 1.25 percent, or 18.65 points, to 1,476.45.
On Tuesday, US President Donald Trump warned that Washington was prepared to "solve the problem" of North Korea on its own if necessary as he and Pyongyang engaged in tit-for-tat comments that sent tensions soaring.
Trump's warning came as a US naval strike group headed towards the Korean peninsula, a show of force that prompted the nuclear-armed North to declare it was "ready to react to any mode of war desired by the US".
On Syria, US Secretary of State Rex Tillerson flew to Moscow on Tuesday to confront the Kremlin about its support for the government of Bashar al-Assad, amid US statements that Russia tried to cover up a chemical attack.
Tokyo stocks were down across the board, with mega bank MUFG declining 2.04 percent to 660 yen. Exporters declined, with Panasonic falling 1.97 percent to 1,241 yen and Toyota trading down 2.13 percent at 5,784 yen.
Struggling Japanese industrial giant Toshiba declined 1.47 percent to 220.2 yen after it reported an unaudited loss of USD4.8 billion in long-overdue financial results for the nine months to December 2016.
Toshiba's troubles revolve around huge writedowns at its US nuclear unit Westinghouse Electric, which filed for bankruptcy protection last month.
In announcing the earnings, Toshiba also warned of the likelihood of a worsening financial situation and said its survival was at risk.