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Tokyo stocks start week in the red
TOKYO, Oct 15, 2018 (BSS/AFP) – Tokyo stocks opened lower Monday, kicking
off the week in the red following several days of extreme volatility on
global markets, with higher oil prices and an expected tax hike weighing on
the Japanese market.
The benchmark Nikkei 225 index was lower by 0.78 percent or 177.31 points
at 22,517.35 in early trade, while the broader Topix index was down 0.63
percent or 10.68 points at 1,691.77.
“The market remains a bit unstable with factors such as higher oil”
worrying investors, Kyoko Amemiya, senior market strategist at SBI
Securities, told AFP.
The oil price has spiked due to concerns over worsening US-Saudi Arabia
relations due to the alleged murder of journalist Jamal Khashoggi in the
Saudi consulate in Istanbul.
Also encouraging market bears was an expected announcement by Prime
Minister Shinzo Abe of a two percentage point hike in the sales tax, which
most experts believe will act as a drag on the world’s third-biggest economy.
“We have never seen a share price rise in the past after an announcement
of a sales tax hike,” noted Amemiya.
Some investors were also seen taking profits after a strong rebound on
Friday, she added.
Looking ahead, investors are closely watching a series of global economic
data due later this week, said Tsuyoshi Nomaguchi, a strategist at Daiwa
Securities.
“The focus is how much impact US interest rate rises would have on
housing-related data, and the extent of the US-China trade war’s impact on
the Chinese economy,” he said.
For that reason China’s July-September GDP data due on Friday is worth
watching, he said.
The dollar fetched 112.09 yen in early Asian trade, against 112.18 yen in
New York.
On Wall Street, the Dow closed up 1.2 percent at 25,339.99.
In Tokyo, some oil-related shares were lower, with oil refiner Idemitsu
Kosan down 0.66 percent at 5,960 yen and its rival JXTG down 0.72 percent at
792.4 yen.
Automakers were also among the losers, with Toyota down 1.31 percent at
6,521 yen and Honda down at 1.87 percent at 3,034 yen.
Banks also fell, with Mitsubishi UFJ Financial down 1.80 percent at 673.3
yen and Sumitomo Mitsui Financial down 1.83 percent at 5,355 yen.
BSS/AFP/HR/0915