TOKYO, Japan (AFP) — Tokyo stocks opened lower on Wednesday after the yen rose to five-month highs against the dollar on concern over tensions in the Middle East and on the Korean Peninsula.
Investors were subdued as they watched developments following last week’s US strike on Syria and intensifying sabre-rattling by the United States and North Korea.
Nervous investors often plough into the yen at times of instability as it is seen as a safe haven during global instability.
The dollar was trading below 110 yen for the first time since November, changing hands at 109.60 yen Wednesday morning against 109.65 yen in New York Tuesday afternoon and 110.66 yen in Tokyo earlier.
A strong yen is negative for Japanese exporters as it erodes their profitability and often drags the stock market lower.
“It is possible that the yen will remain strong for a while due to rising geopolitical risks, which would dampen appetite for dip buying,” Okasan Online Securities said in a commentary.
Tokyo’s benchmark Nikkei 225 index lost 0.80 percent, or 149.67 points, to 18,598.20 in early trading, while the Topix index of all first-section issues was down 0.82 percent, or 12.24 points, at 1,482.86.
On Tuesday, US President Donald Trump warned that Washington was prepared to “solve the problem” of North Korea on its own if necessary as he and Pyongyang engaged in tit-for-tat comments that sent tensions soaring.
Trump’s warning came as a US naval strike group headed towards the Korean Peninsula, a show of force that prompted the nuclear-armed North to declare it was “ready to react to any mode of war desired by the US”.
On Syria, US Secretary of State Rex Tillerson flew to Moscow on Tuesday to confront the Kremlin about its support for the government of Bashar al-Assad, amid US statements that Russia tried to cover up a chemical attack.
Tokyo stocks were down across the board.
Toyota tumbled 1.89 percent to 5,798 yen and Panasonic fell 2.01 percent to 1,240.5 yen.
Nintendo lost 1.22 percent to 25,400 yen while Mitsubishi UFJ Financial slipped 2.22 percent to 658.8 yen.
Struggling Japanese industrial giant Toshiba declined 1.02 percent to 221.2 yen after it reported an unaudited loss of $4.8 billion in long-overdue financial results for the nine months to December 2016.
Toshiba’s troubles revolve around huge writedowns at its US nuclear unit Westinghouse Electric, which filed for bankruptcy protection last month.
In announcing the earnings, Toshiba also warned of the likelihood of a worsening financial situation and said its survival was at risk.
© Agence France-Presse
