TOKYO: Tokyo stocks plunged 1.78 percent by the break, with investors running to the sidelines on fears of a Greek default, which has also pushed up the yen.
The Nikkei 225 index at the Tokyo Stock Exchange fell 368.81 points to 20,337.34, while the Topix index of all first-section issues was down 1.70 percent, or 28.41 points, at 1,638.62.
Greek Prime Minister Alexis Tsipras broke off deadlocked bailout talks at the weekend fuelling speculation that Athens was headed for financial collapse and a possibly messy exit from the euro.
Tsipras called a surprise July 5 referendum on the creditors’ latest reform demand in return for a financial rescue.
“Carrying out a referendum buys the Greek side some time. Digesting the worst-possible scenario of a Greek default, global stock markets could fall one to two percent today,” said Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group.
“Investors will initially evoke the Lehman crisis and wind-down long positions to take risk off the table,” he told Bloomberg News, referring to a global turmoil that followed the 2008 collapse of Lehman Brothers.
Tokyo was the first major market to react to the weekend Greek move, with the benchmark index falling more than 2 percent in opening trade.
