INSUBCONTINENT EXCLUSIVE:
TOKYO: Japan's Nikkei tumbled 2 percent to a five-week low on Monday as a sell-off in emerging market currencies spooked stock investors,
with the safe-haven yen's appreciation hurting sentiment and dragging down the broader market.
Commodity stocks underperformed on worries
about emerging market economies after the South African rand fell more than 10 percent versus the United States dollar as massive falls in
the Turkish lira triggered sell-offs in other currencies.
The Nikkei share average dropped 440.65 points to 21,857.43, the lowest close
since July 6.
All sectors except for services fell, with shippers, metal and iron stocks and construction machinery firms and financials
stumbling.
"As long as the Turkey woes continue, there are worries that investors will keep unloading risky assets which include Japanese
stocks," said Chihiro Ohta, general manager at SMBC Nikko Securities.
The Mothers market, an index for startup companies, tumbled 4.1
percent to 962.48, its worst closing level since January 2017 and the biggest one-day drop in five months.
"Since risk sentiment was
dampened by the strong yen and worries in emerging market currencies, growth stocks are the last place investors are looking," said Hikaru
Sato, a senior technical analyst at Daiwa Securities.
"Even defensive stocks were sold because there is too much uncertainty in the global
market now," he said.
The euro touched a 13-month low against the dollar on Monday as investors bid up safe havens such as the greenback and
the yen on worries about the exposure of European banks to Turkey.
After hitting a record low 7.24 against the dollar early on Monday,
Turkey's lira found some support when Finance Minister Berat Albayrak said the government has drafted an economic action plan and the
banking watchdog said it limited swap transactions.
The dollar fell 0.7 percent against the yen to 110.15 yen , the lowest level in six
weeks.
Index-heavyweight Fast Retailing dropped 1.7 percent and knocked a hefty 30 points from the Nikkei, while technology stocks TDK Corp
tumbled 5.3 percent and Tokyo Electron shed 3.1 percent.
Construction machinery stock Komatsu slid 4.0 percent and Hitachi Construction
Machinery declined 4.2 percent.
Commodity stocks were hard hit
Nippon Steel Sumitomo Metal Corp fell 2.5 percent
Shippers Mitsui OSK Lines lost 3.4 percent and Kawasaki Kisen tanked 5.2 percent.
Banking stocks also lost ground
Mitsubishi UFJ Financial Group dropped 2.8 percent and Sumitomo Mitsui Financial Group 2.1 percent.
Discount goods chain operator Don
Quijote bucked the trend and soared 5.6 percent after saying it expects a 6.2 percent rise in sales to 1 trillion yen for the year ending
June 2019, moving forward its goal for that volume by one year.
The broader Topix dropped 2.1 percent to 1,683.50.
