TOKYO, Japan (AFP) — Japanese shares ended the morning lower Monday as Takata was hit by the firm’s agreement to plead guilty to fraud and pay $1 billion to settle a deadly airbag scandal.
The volatile stock dropped nearly 10 percent to 956 yen ($8.40), after soaring more than 16 percent Friday ahead of the expected announcement.
At the lunch break, Tokyo’s benchmark Nikkei index was down 0.91 percent, or 175.38 points, at 19,111.90, while the broader Topix index of all first-section issues was down 0.84 percent, or 12.95 points, at 1,531.94.
US officials said Friday that Takata, one of the world’s biggest suppliers of auto safety equipment, had agreed to the settlement over the defect, which led to the recall of more than 100 million airbags globally.
The US also indicted three former Takata employees, bringing the first criminal charges in a scandal over exploding airbags that caused the auto industry’s biggest safety recall.
The individuals, who left the company in 2015, were charged with fraud for hiding the flaws in the airbags, so far blamed for 16 deaths and 100 injuries worldwide.
The company has been ensnared since 2013 in a scandal over airbags blamed for exploding with deadly force, sending metal shards hurtling toward passengers.
Takata has been in talks with potential buyers who are evaluating its potential liabilities.
“The agreement is one of the steps forward but our concern is still big given the company hasn’t shown when and how it would revive,” Koji Endo, a Tokyo-based senior research fellow at SBI Securities, told Bloomberg News.
“The settlement fine and restitution fund for individuals and automakers look small compared to what actually happened. There still may be more cost burdens on this company.”
The yen picked up and the pound tumbled in forex trading, driven by concerns that Britain may be headed for a clean break from the EU.
The pound tumbled to $1.1986 shortly after 3:00am (1800 GMT Sunday) Tokyo time, hitting the lowest level since the October 2016 “flash crash” in which sterling dived to a more than 31-year low of $1.1841.
The currency recovered some ground to sit around $1.2021 at 12:30 pm (0330 GMT), but was still down from $1.2197 late Friday.
The dollar slipped against Japan’s currency, which is seen as a safe investment, to 114.04 yen from 114.53 yen in New York on Friday. A stronger yen in a negative for Japanese shares.
In Tokyo, Nintendo fell 2.69 percent to 23,110 yen after it unveiled its highly anticipated new Switch game console on Friday.
Major automakers also fell, with Toyota down 0.85 percent at 6,823 yen and Honda slipping 0.17 percent to 3,440 yen. Nissan fell 0.56 percent to 1,153.5 yen.
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