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Tokyo’s Nikkei plunges nearly 2% on Turkey crisis
TOKYO, Aug 13, 2018 (BSS/AFP) – Tokyo’s benchmark Nikkei index dropped
nearly two percent on Monday as Turkey’s lira plunged on tensions between
Ankara and Washington, fanning fears of possible wider financial instability.
The Nikkei 225 index lost 1.98 percent or 440.65 points to close at
21,857.43, falling for the fourth straight session, while the broader Topix
index gave up 2.13 percent or 36.66 points to 1,683.50.
“A chain reaction of selling from overseas markets directly hit Tokyo
today,” said Hikaru Sato, senior technical analyst at Daiwa Securities.
“A strong yen accelerated the selling in the afternoon,” Sato told AFP.
The Turkish lira, which fell to a new record low of 7.2362 to the dollar
early Monday before Asian trade began, fluctuated during the trading day,
particularly after Turkey’s central bank announced it was ready to take “all
necessary measures” to ensure financial stability.
It was at 6.6615 to the US dollar in Tokyo afternoon trading.
Experts said Tokyo trade was likely to remain under pressure in coming
days 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 to be released on Tuesday,
as Washington stokes trade tensions with Beijing.
The dollar was at 110.27 yen, down from 110.88 yen seen Friday in New
York.
Among major shares, Toyota dropped 2.10 percent to 6,805 yen, while Sony
plunged 2.21 percent to 5,917 yen, with Nintendo down 2.24 percent at 35,680
yen.
Banks lost ground as Mitsubishi UFJ Financial Group gave up 2.77 percent
to 650.9 yen, while Mizuho Financial Group lost 1.28 percent to 192.5 yen.
BSS/AFP/HR/1420