TOKYO: – Tokyo stocks dropped 1.31 percent Monday morning as investors shrugged off Prime Minister Shinzo Abe’s widely expected weekend election win and focussed on drops on Wall Street and lower oil prices.
The Nikkei 225 index at the Tokyo Stock Exchange lost 227.17 points to 17,144.41 by the break while the Topix index of all first-section issues was down 1.10 percent, or 15.45 points, to 1,384.20.
Abe’s ruling coalition scored a major victory in Sunday’s general election, retaining their two-thirds majority in the lower house.
“The elections are a net plus for the market, but really came as no surprise and thus are not likely to be a very large factor in today’s trading,” said Nomura Securities equity market strategist Junichi Wako.
“Analysts are essentially back to where they were before — hoping for a thorough fleshing out of Abe’s plan to revitalise the economy,” he told Dow Jones Newswires.
A survey by the Bank of Japan showed Monday that confidence among major Japanese manufacturers edged down in the three months to December.
“Weakness on Wall Street, the dollar, and in oil prices are all contributing to the Nikkei’s fall,” said Yutaka Miura, senior technical analyst at Mizuho Securities.
“The technical inability of the Nikkei to rise and hold above the 18,000 level in past weeks has also contributed to the feeling of an upside limit, which has become a further disincentive against chasing the market up,” he said.
“All eyes are now on the US Fed (which meets December 16-17) and its take on the state of the economic recovery,” Miura said.
A stronger confidence in the economy could fuel speculation that the US central bank would start raising its key rate sooner than later, bolstering the dollar.
The dollar was trading at 118.82 yen in midday trade Monday against 118.78 yen in New York late Friday.
Among major exporters, Toyota lost 1.96 percent to 7,353.0 yen and Sony fell 2.04 percent to 2,390.5 yen.
Oil exploration companies fell, with Inpex down 1.14 percent at 1,210.5 yen and Japan Petroleum Exploration off 0.84 percent at 3,525.0 yen.