Tokyo stocks down as Turkey jitters continue

Tokyo stocks down as Turkey jitters continue
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Tokyo: Tokyo stocks erased early gains to finish lower in Wednesday trading, as Turkey’s currency crisis fuelled concerns of contagion to other emerging economies and pressured Asian shares.

The benchmark Nikkei 225 index, which jumped more than two percent on Tuesday, lost 0.68 percent or 151.86 points to 22,204.22.

The broader Topix index was down 0.76 percent or 12.92 points at 1,698.03.

Tokyo shares opened higher after Wall Street advanced on Tuesday as Turkey’s lira recovered some ground.

But they soon fell into negative territory as Turkey’s financial woes continued weighing on investor sentiment in the region, sending key Asian shares down.

“While the lira is stabilising, investors are still concerned that the crisis will spread to other emerging economies and currencies,” said Hikaru Sato, senior technical analyst at Daiwa Securities.

“Trading is expected to remain nervous for now,” Sato told AFP.

Investors were watching closely after the lira hit record lows on Monday and equity markets dropped sharply on concerns Turkey’s financial crisis could spread globally.

“Risk aversion triggered by the lira’s plunge is taking a breather for now,” Okasan Online Securities chief strategist Yoshihiro Ito said in a commentary.

But he noted Turkish President Recep Tayyip Erdogan had not eased his tough stance as he said Turkey would boycott US electronic goods like the iPhone in response to punitive sanctions from Washington.

“We can’t take our eyes off the Turkish situation as how this will develop is increasingly uncertain,” Ito said.

Earlier Wednesday, Turkey announced it was hiking tariffs on a range of US goods in “retaliation for the conscious attacks on our economy by the US administration.”

The dollar was at 111.26 yen in Asian afternoon trade against 111.21 yen in New York Tuesday afternoon.

In individual stocks trade, shares of game makers plunged as China’s regulators have reportedly frozen approvals of game licenses amid a government shakeup.

Online game company Nexon slumped 5.85 percent to 1,318 yen, general game maker Capcom dropped 2.70 percent to 2,558 yen and Nintendo was down 2.95 percent at 34,850 yen.

Toyota fell 0.71 percent to 6,815 yen as Nissan lost 0.38 percent to 1,033.5 yen.

Panasonic dropped 1.13 percent to 1,390.5 yen with Sony down 0.39 percent at 6,000 yen.