Tokyo stocks close lower on Wall Street loss, virus fears

TOKYO – Tokyo stocks closed down yesterday following Wall Street falls on continued jitters over the global spread of coronavirus and ahead of key United States Senate run-off elections.

The bellwether Nikkei 225 index lost 0.37%, or 99.75 points, to 27,158.63, while the broader Topix index fell 0.19%, or 3.37 points, to 1,791.22.

The market remained under selling pressure throughout the day after the Dow Jones index gave up 1.3% as market participants watched the all-important Georgia Senate run-off elections that will decide the balance of power in Congress.

“It was hard to buy shares actively today as players were on the sidelines, closely watching the Georgia elections,” said IwaiCosmo Securities broker Toshikazu Horiuchi.

Also concerning investors was the outlook for the pandemic as British Prime Minister Boris Johnson announced a sweeping lockdown to slow the spread of the disease.

Japan’s Prime Minister Yoshihide Suga also announced yesterday that he was moving to issue a localised state of emergency for the greater Tokyo area, which continues to see record daily infection figures.

Suga said the next state of emergency will be “limited” and “focused” in its scope, unlike the nation's last state of emergency last year that kept most consumers at home across the country and brought the economy to a halt.

“Still, the greater Tokyo area accounts for a third of Japan’s gross domestic product, and damage to the economy is inevitable,” Okasan Online said in a note.

“The services sector especially will feel more pain with a further drop in travel demand and falls in dining demand due to a renewed focus on teleworking,” the brokerage said. 

However, technical charts continue to indicate longer-term optimism, it added.

The dollar stood at 102.97 yen in Asian afternoon trade, down from 103.14 seen yesterday in New York.

Automakers were among the losers. Nissan slumped 2.60% to 538.6 yen and Toyota dropped 1.46% to 7,812 yen. 

Airline companies also remained under pressure on virus fears as ANA Holdings fell 1.23% to 2,204.5 yen with Japan Airlines down 0.98% at 1,907 yen. 

But Sony gained 1.29% to 10,570 yen with Nintendo up 0.82% at 66,090 yen. – AFP, January 5, 2021