Tokyo stocks close down 2.35 percent
Friday, 22 March 2013
TOKYO: Tokyo stocks dropped 2.35 percent on Friday as the yen rallied following losses on Wall Street and in Europe fuelled by fears over the banking crisis in Cyprus.
The benchmark Nikkei 225 index lost 297.16 points to 12,338.53, while the Topix index of all first-section shares was off 1.85 percent or 19.53 points, at 1,038.57.
"The Cyprus crisis sent European and US shares down overnight, and Japanese shares followed suit today," said Hirokazu Fujiki, strategist with Okasan Securities.
The European Central Bank issued an ultimatum to Cyprus, saying it had until Monday to agree a bailout plan with the European Union and International Monetary Fund, or it would suspend emergency funds to Cypriot banks.
That would likely cause the island nation's teetering lenders to collapse, fuelling concerns over the wider eurozone.
The selling pressures in Tokyo were fuelled further by a stronger yen, which makes Japanese exporters less competitive overseas, brokers said.
The yen won support after the Bank of Japan's new governor Haruhiko Kuroda quashed hopes for immediate easing measures as he held his first official news briefing Thursday.
Some had expected him to call an emergency board meeting that would usher in aggressive policy action.
Kuroda declined to comment on reports of the meeting, but pledged "all-out efforts" to rid Japan of growth-sapping deflation that has plagued the economy for decades.
"Faith that the new BoJ leadership will be active in taking easing steps should keep stock prices reasonably well-supported," SMBC Nikko Securities general manger of equities Hiroichi Nishi told Dow Jones Newswires.
Major exporters slipped in Tokyo trade, with Sony falling 1.77 percent to 1,660 yen, Sharp dropping 1.94 percent to 302 yen, Nissan off 2.97 percent at 946 yen and Nikon losing 3.18 percent to 2,252 yen.
In forex markets, the dollar weakened to 94.67 yen, from 95.01 yen in New York on Thursday, while the euro bought 122.14 yen from 122.58 yen. (AFP)