Tokyo: Stocks tumble 2.88% on Greece fears

[TOKYO] Tokyo stocks plunged 2.88 per cent Monday, amid investor fears of a Greek default which has also pushed up the yen.

The Nikkei 225 index at the Tokyo Stock Exchange fell 596.20 points to close at 20,109.95, while the Topix index of all first-section issues was down 2.53 per cent, or 42.21 points, at 1,624.82.

Greek Prime Minister Alexis Tsipras broke off deadlocked bailout talks at the weekend, fuelling speculation that Athens was headed for financial collapse and a possibly messy exit from the euro.

Mr Tsipras called a surprise July 5 referendum on the creditors' latest reform demands in return for a financial rescue.

Tokyo was the first major market to react to the weekend Greek move, with the benchmark index falling more than two per cent in opening trade and staying under selling pressure for the rest of the day.

"Tokyo stocks fell in afternoon trade following drops of Chinese and other Asian shares," said Hideyuki Suzuki, general manager of Investment Market Resarch at SBI Securities.

Chinese shares tumbled more than seven per cent in afternoon trade Monday, extending losses from the past two weeks despite a surprise interest rate cut at the weekend.

Tokyo investors, who were also concerned about a strong yen, remained on the sidelines awaiting reactions from Europe and US markets later in the day, dealers said.

The yen, considered a safe haven in times of financial turmoil, strengthened - a negative for Japanese exporters, whose products abroad become more expensive.

The euro tumbled to 134.84 yen from 138.26 yen in New York while the dollar fell to 122.44 yen from 123.89 yen.

In Tokyo share trading, exporters were broadly lower, with Canon down 2.80 per cent at 3,965 yen and Sony declining 2.72 per cent to 3,773 yen.

AFP