TOKYO: Tokyo stocks tumbled 1.43 percent on Friday as shareholders moved into the yen following Switzerland’s surprise decision to take out its currency peg to the euro.
The Nikkei 225 index at the Tokyo Stock Exchange, which was off nearly 3.0 percent at one stage, lost 244.54 points to end at 16,864.16.
The Topix index of all first-section shares was down 0.93 percent, or 12.87 points, at 1,363.73.
The Japanese market — which added 1.86 percent Thursday — plunged at the open as a sharply stronger yen dented exporter shares while firms with ties to Switzerland also fell.
On Thursday, the Swiss National Bank (SNB) said it no longer needed the link of 1.20 francs to the euro, which it put in place three years ago during the European debt crisis.
Minutes after the announcement, the Swiss franc surged 30 percent against the single European currency.
The news rattled global markets as investors rushed into safer investments, such as the yen.
Earlier in the day, the dollar dropped to a low of 115.84 yen, from 116.25 yen in New York and sharply down from 117.70 yen in Tokyo earlier Thursday.
In afternoon Tokyo trade, the dollar fetched 116.57 yen.
“Keeping the franc weak against the euro might have been too costly for the SNB, especially with the European Central Bank potentially adding more stimulus,” Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.
Japanese exporters took a hit from the stronger yen as it makes them less competitive overseas and dents profits.
Toyota fell 0.15 percent to 7,514.0 yen, while Sony dropped 4.63 percent to 2,384.0 yen as Canon lost 1.18 percent to 3,757.5 yen.
Chugai Pharmaceutical, an importer of goods from Switzerland, fell 2.47 percent to 3,150.0 yen while drugmaker Sosei Group, which relies on the Swiss market for the majority of its sales, tumbled 4.59 percent to 3,945.0 yen.
Power tool maker Makita, whose biggest market is Europe, fell 2.47 percent to 5,130.0 yen.
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