TOKYO: Tokyo stocks fell to their second worst loss of the year Monday, as investors trimmed risk on news that failed last-ditch negotiations between Greece and its creditors have pushed the indebted nation close to debt default.
The Nikkei Stock Average ended down 2.9 per cent at 20,109.95 for its third consecutive decline and sharpest percentage fall since Jan. 6.
Knee-jerk frustration over Greece roiled markets throughout Asia Monday, but Japan’s ranked among the worst performers.
However, traders were confident that far from representing a warning sign, the selling may, present longer-term buying opportunities in an otherwise stubbornly upward-trending market. Despite the fall, the Nikkei remains up 15.2 per cent for the year-to-date so far.
“In terms of the danger of a contagious spread of Greece-like woes to other less well-off euro-zone nations, the preponderance of central bank money in Greece (as opposed to regional lenders), should make its problem a special, one-off case,” says CLSA equity strategist Nicholas Smith.
“The risk of (Greece) touching off further problems is low.”
However, as the events involving Greece and the eurozone are more pertinent to those markets, the full impact may not be felt until they open, said several traders. As such, Japan could very well see a ‘double-whammy’ effect on Tuesday, in reaction to what happens overseas later today and tonight, including on Wall Street.
