TOKYO: Tokyo stocks plunged 1.09 percent on Wednesday morning, dragged down by a stronger yen and a sell-off on Wall Street as oil prices head towards six-year lows.
The Nikkei 225 index at the Tokyo Stock Exchange slipped 186.51 points to 16,901.20 by the break, while the Topix index of all first-section shares was off 0.86 percent, or 11.81 points, at 1,362.88.
“The drop in oil prices is quite severe, so whenever there’s some weakness in oil we tend to see risk aversion,” Hiroichi Nishi, an equities manager at SMBC Nikko Securities, told Bloomberg News.
“Risks abroad are a burden on investor sentiment.”
US benchmark West Texas Intermediate for February fell 18 cents to $45.71, a level not seen since March 2009, and Brent slipped 25 cents to $46.34, its lowest since April 2009.
Both contracts were hammered Tuesday after two members of OPEC said the cartel could not prevent prices from plunging further, despite losing more than 50 percent since June.
On Wall Street oil woes hit the three main indexes, with the Dow losing 0.15 percent while the S&P 500 down 0.26 percent and the Nasdaq dipping 0.07 percent.
The yen rose against other currencies on safe-haven buying, a negative for Japanese exporters as the stronger currency makes them less competitive abroad and erodes repatriated profits.
The dollar slipped to 117.50 yen, from 117.90 yen in New York and above 118 yen in Tokyo earlier Tuesday.
In share trading Toyota fell 1.46 percent to 7,409.0 yen, Sony dropped 1.85 percent to 2,473.5 yen and oil refiner JX Holdings lost 3.15 percent at 424.0 yen.
