Tokyo stocks open lower as yen rises on US, Europe political worries

Exchange Square in Hong Kong with bull statue.
Exchange Square in Hong Kong with bull statue.

Tokyo - Tokyo stocks opened lower on Tuesday with exporters hit as the yen jumped on US and European political uncertainty.

The Japanese currency, which often draws safe-haven buying in times of instability, rose on questions over US policy implementation under President Donald Trump and concerns about the French election.

"The market's tone has been one of risk-off, as political fallout in both Europe and the United States is weighing on investor resolve, imposing an unpalatable risk on investor sentiment," said Stephen Innes, senior trader at forex firm OANDA.

"Investors are now seeking shelter in safe havens to weather the mounting risk," he said in a commentary.

A strong yen is negative for Japanese exporters as it erodes their income when repatriated.

The dollar was quoted at 111.81 yen early Tuesday, up from 111.70 yen in New York Monday afternoon but well below from 112.49 yen seen in Asia earlier.

In Tokyo stock trading, the benchmark Nikkei 225 index fell 0.68%, or 129.81 points, to 18,846.90 in the first few minutes of trading while the Topix index of all first-section issues was down 0.64%, or 9.78 points, at 1,510.64.

France's right-wing candidate Francois Fillon has been embroiled in a money scandal and his troubles could boost far-right leader Marine Le Pen, whose campaign echoes many themes that propelled Donald Trump to the White House.

Le Pen's list of 144 "commitments" to the nation include pulling France out of the eurozone.

"The French election is one of the biggest risks of this year, and if Le Pen wins within this climate of increasing anti-globalism, there's the risk that the European Union will collapse," Toshihiko Matsuno, a senior strategist at SMBC Friend Securities, told Bloomberg News.

Toyota fell 2.63% to 6,322 yen as the auto giant's upgrades in full-year outlooks fell short of market expectations.

Suzuki, which announced it would begin concrete discussions with Toyota for a proposed business partnership, sank 1.54% to 4,406 yen.

Takata climbed 6.42 percent to 464 yen after the previous day's 18.65% plunge that stemmed from fears for the future of the airbag maker at the centre of the biggest-ever auto safety recall.

Mitsubishi UFJ Financial fell 1.74% to 741.5 yen while Nintendo lost 2% to 23,260 yen.

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