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Tokyo stocks tumble as US-NKorea tensions mount

Aug 09, 2017 12:17 PM GMT+0530 | 0 Comment(s)

AFP - Tokyo stocks dropped Wednesday as investors pressed the sell button in response to soaring tensions between the United States and North Korea.

The yen jumped against the dollar -- a negative for Japanese shares -- as traders looked for safe investments after President Donald Trump vowed a devastating response to any escalation of Pyongyang's nuclear programme.

"North Korea best not make any more threats to the United States," Trump warned.

"They will be met with fire and fury like the world has never seen."

The US president's comments came after reports that North Korea has produced a nuclear warhead small enough to fit inside its missiles.

Trump's "wording was strong... prompting (investors) to shun risk, boosting the yen and pushing the stock market down", said Mari Iwashita, chief market economist at SMBC Friend Securities.

Tokyo's benchmark Nikkei 225 index dropped 1.29 percent, or 257.30 points, to end the day at 19,738.71 while the Topix index of all first-section issues fell 1.07 percent, or 17.42 points, to 1,617.90.

In currency markets, the dollar dropped as low as 109.74 yen, its lowest in about two months, from 110.39 yen in New York and the upper half of the 110-yen range in Tokyo earlier Tuesday.

A rise in the yen, which often draws safe-haven buying in times of uncertainty, is bad for Japanese exporters because it shrinks the value of their repatriated profits.

Toyota shares tumbled 1.57 percent to 6,236 yen and Nintendo was off 1.83 percent to end the session at 37,490 yen.

Major bank Mitsubishi UFJ fell 1.06 percent at 703 yen.

Struggling conglomerate Toshiba rose 3.20 percent to sit at 290 yen on expectations that it will meet a deadline to submit its long-delayed financial results, easing fears the embattled stock will be delisted from Japan's premier exchange.

Smartphone screen maker Japan Display fell 1.51 percent to 195 yen. After the market closed, the firm said it would slash more than 3,700 jobs, or about 30 percent of its workforce, as part of a broader restructuring.


 

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