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Tokyo: Shares open 0.80% lower on weak Wall St, China worries

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Tokyo shares opened 0.80 per cent lower Monday as investors braced themselves for further volatile trading following a weak showing on Wall Street and worries over the Chinese economy.

[TOKYO] Tokyo shares opened 0.80 per cent lower Monday as investors braced themselves for further volatile trading following a weak showing on Wall Street and worries over the Chinese economy.

The Nikkei index at the Tokyo Stock Exchange fell 141.88 points to 17,650.28 shortly after the market opened.

The Topix index of all first section shares slipped 0.99 per cent, or 14.30 points, to 1,430.23.

The falls trailed sharp drops last week in New York after the Friday release of weaker-than-expected US jobs data.

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The Labor Department reported the economy added fewer jobs than forecast, 173,000, but the previous two months' job gains were revised upwards, pushing the unemployment rate down more than expected to 5.1 per cent.

Mixed with concern over China, the data sent the Dow Jones Industrial Average down 1.66 per cent, or 272.38 points, to 16,102.38 Friday while the Nasdaq Composite dropped 1.05 per cent, or 49.58 points, to 4,683.92.

It was the last major jobs data before the Federal Reserve Bank's policy board meets on September 16-17 to consider raising the key federal funds rate for the first time since 2006.

Tokyo's weak start came amid global caution over the Chinese economy, a key subject at the weekend meeting of G20 finance ministers and central bankers in Ankara.

"We're seeing the negative effects from China and emerging economies," Shoji Hirakawa, chief equity strategist at Okasan Securities, told Bloomberg News.

"The US has started seeing that there's a risk of contagion as China's economy slows. The jobless rate fell, but labor participation was weaker. I think a rate hike in September will be difficult," he said.

But the prospects for a US rate hike are still uncertain at best, with other analysts saying the jobs data does not necessarily provide clues strong enough to change Fed policy makers' decision.

Investors will be keeping their eye on the markets in China as trading resumes after a long weekend.

The US markets will remain closed Monday for a long Labour Day weekend.

AFP

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