Tokyo stocks drop sharply on news PM Abe will resign – The Mainichi

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    TOKYO (Kyodo) — Tokyo stocks fell and the yen strengthened Friday after media reports that Prime Minister Shinzo Abe will step down due to health reasons, with the Nikkei briefly diving more than 2 percent.

    The 225-issue Nikkei Stock Average ended down 326.21 points, or 1.41 percent, from Thursday at 22,882.65. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 11.02 points, or 0.68 percent, lower at 1,604.87.

    Decliners were led by information and communication, electric appliance and retail issues.

    The yen drew buying after the reports rattled Japan’s financial markets, with the U.S. dollar falling to the lower 106 yen zone from the upper 106 yen range.

    A source from his ruling Liberal Democratic Party said Friday that Abe, the country’s longest-serving prime minister, will resign for health reasons. Abe had been scheduled to hold a press conference, at which he was expected to explain his recent hospital visits and the government’s response to the novel coronavirus pandemic.

    Tokyo stocks were firm in early trading, with the Nikkei rising above 23,300 at one point, as investors initially welcomed longer-term easing from by U.S. Federal Reserve to help the economy.

    But stocks later dived, falling over 600 points from the previous day, as investors quickly turned risk averse on the resignation reports that sparked political uncertainty in the world’s third-largest economy.

    « Investors grew worried about who will succeed Mr. Abe, » said Shingo Ide, chief equity strategist at the NLI Research Institute.

    « Uncertainty over relations with the United States under (President Donald) Trump has also prevailed, » he added.

    The losses eased somewhat toward the end of the day’s trading as investors digested the reports, with the market underpinned by relatively solid performances in the insurance and banking sectors.

    The financial sectors tracked their upbeat U.S. counterparts overnight, following the unveiling by the U.S. central bank of a more flexible approach to its long-term objective of 2 percent inflation, which would involve periods of overshooting the goal.

    On the First Section, declining issues outnumbered advancers 1,543 to 568, while 58 ended unchanged.

    Electric appliance issues fell, with Sony shedding 279 yen, or 3.3 percent, to 8,280 yen and Fujitsu sagging 425 yen, or 3.0 percent, to 13,710 yen.

    Among financial issues, life insurer Dai-ichi Life Holdings surged 67.00 yen, or 4.4 percent, to 1,585.50 yen and lender Mitsubishi UFJ Financial Group advanced 8.70 yen, or 2.0 percent, to 440.60 yen.

    Trading volume on the main section rose to 1,666.10 million shares from Thursday’s 923.62 million shares.



    SOURCE: https://www.w24news.com

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