Tokyo stocks close down 1.22pc
October 07, 2013 - 9:23:41 am
TOKYO: Tokyo stocks fell 1.22 percent to close at their lowest level in more than a month on Monday as the dollar weakened against the yen on growing fears about the looming US debt deadline.
The benchmark Nikkei 225 index lost 170.99 points to 13,853.32, the worst finish since September 2, while the Topix index of all first-section shares fell 1.40 percent, or 16.24 points, to 1,147.58.
"There are very few solid buying incentives right now with the US government shutdown and debt limit standoff looking as intractable as ever," said an equity-trading director at a foreign brokerage.
Trading actively now is risky as any positive development in the US political wrangling could send the weak dollar surging higher, taking the stock market with it.
"A lot of players are simply staying away," the trader told Dow Jones Newswires.
US fiscal fears heaped pressure on the dollar, with the unit down at 97.09 yen in Tokyo, from 97.47 yen in New York Friday afternoon.
Traders fear US lawmakers -- whose face-off has forced a government shutdown will not strike a budget deal before October 17, when the government runs out of cash to pay its bills and could default.
US Treasury Secretary Jack Lew warned Sunday that Congress was "playing with fire" as Republican House leader John Boehner said the party would not raise the US debt ceiling without spending cuts.
The shutdown has also delayed the release of key government data, such as the monthly jobs report which had been due Friday.
In Tokyo stock trading, major exporters fell, with Toyota Motor down 1.45 percent to 6,090 yen and Sony off 1.83 percent to 1,980 yen.
Bucking the market's downward trend, Japan Airlines (JAL) jumped 3.01 percent to 5,810 yen as speculators traded on rumours it would announce a landmark aircraft order with Airbus.
Minutes after the market closed, JAL said it would place its first-ever order with Airbus, purchasing 31 Airbus A350 planes in a deal valued at $9.5 billion.
The move challenges Boeing's dominance in the Japanese market as it struggles with its troubled Dreamliner. (AFP)