Tokyo shares open lower on Turkey crisis

Pedestrians walk past an electronic board showing the stock market indices of various Asian countries in Tokyo February 24, 2015. — Reuters pic
Pedestrians walk past an electronic board showing the stock market indices of various Asian countries in Tokyo February 24, 2015. — Reuters pic

TOKYO, Aug 13 — Tokyo stocks opened lower this morning as investors watched tension between the US and Turkey that has driven down the lira, fanning fears of possible wider financial instability.

The benchmark Nikkei 225 index fell 0.83 per cent or 185.56 points to 22,112.2 while the broader Topix index gave up 0.83 per cent or 14.22 points to 1,705.94.

The Turkish lira fell to a new record low of 7.2362 to the dollar overnight, before recovering to around 6.8222 in Asian trading, similar to its trading price on Friday.

Experts said Tokyo trade would be under pressure with investors worried about the possibility of contagion from Turkey.

“The dominating theme of this week is likely to be the Turkish situation,” Okasan Online Securities said in a note to clients.

“The ‘Turkey shock’ from last weekend, triggered by sharp plunges of the lira, has fuelled fears that it may impact financial institutions in Europe,” it said.

The Turkish lira began its plunge last week on the nation’s rising tensions with US President Donald Trump, who is demanding the release of an American pastor held in Turkey and has doubled steel and aluminium tariffs on the country.

President Recep Tayyip Erdogan has responded with defiance, describing the crash as a “political plot” against Turkey.

Okasan said investors would also be looking to Chinese economic data, including retail sales and industrial production, as Washington stokes trade tensions with Beijing.

But solid quarterly earnings from many firms would support Tokyo trade, the brokerage said.

The dollar was at 110.68 yen, slightly off from 110.88 yen seen Friday in New York.

Among major shares, Toyota dropped 1.09 per cent to 6,875 yen, while Sony fell 1.52 per cent to 5,959 yen.

Mitsubishi UFJ Financial Group gave up 2.57 per cent to 652.3 yen, while Mizuho Financial Group lost 1.64 per cent to 191.8 yen. — AFP

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