Tokyo: Stocks close down 2.25%

[TOKYO] Tokyo shares closed down 2.25 per cent on Wednesday following a sell-off across global markets, while a stronger yen pressured exporters.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange tumbled 400.80 points to 17,412.58, suffering the worst points loss in more than three weeks.

The Topix index of all first-section issues was down 2.04 per cent, or 29.26 points, at 1,406.83.

The yen, considered a safe haven in the time of turmoil, rose against the dollar on worries ranging from tightened Chinese lending rules to political uncertainty in Greece.

The greenback was at 118.69 yen Wednesday afternoon, down from 119.63 yen in New York Tuesday afternoon and 120.18 yen in Tokyo earlier Tuesday.

After the recent buying binge that boosted the Nikkei to a seven-year high, investors "wanted to square positions" to lock in profits, said Toshihiko Matsuno, senior strategist at SMBC Friend Securities.

"They were waiting for a cue (for selling), which could be anything," he said.

Monday's downward revision in Japanese July-September growth data had too small an impact to trigger selling.

"But the 5 per cent drop in Shanghai yesterday was a tough one" although the stocks rebounded somewhat Wednesday, Matsuno said.

Equities markets were down globally on Tuesday with Shanghai shares plunging 5.43 per cent on worries over tighter lending rules.

Greek stocks dived 12.78 per cent in their biggest one-day drop in nearly three decades after the government unexpectedly brought forward a high-stakes presidential vote to December 17.

"In Greece it looks as if the current government is gambling," he said adding there was "no wonder" if fears of further eurozone turmoil were revived.

Investors also want to decide on their next move after seeing the result of snap elections in Japan on Sunday, he said.

Bucking the overall downward trend, Skymark shares rocketed up 17.31 percent to 271 yen on the possibility of the struggling budget carrier getting assistance from the nation's two biggest airlines.

The firm said Wednesday it was considering asking for help from domestic giant All Nippon Airways, even while eyeing a tie-up with ANA's rival Japan Airlines.

Many exporters were lower, with Toyota down 3.00 per cent at 7,523.0 yen and Canon off 2.65 per cent at 3,792.5 yen.

Construction machinery maker Komatsu dropped 3.42 per cent to 2,750.0 yen.

AFP