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Tokyo stocks open 1.83% lower

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February 26 2013, 11:26AM

Tokyo stocks opened 1.83 per cent lower on Tuesday as the safe-haven yen soared on worries over Italian election results that could signal fresh instability in the eurozone.

The Nikkei 225 index at the Tokyo Stock Exchange, which gained more than two per cent on a weak yen on Monday, was down 212.86 points to 11,449.66 at the start.

The euro was at $1.3068 and 120.76 yen in early Asian trade on Tuesday compared with $1.3065 and 120.12 yen in New York Monday afternoon.

The dollar bought 92.42 yen against 91.92 yen.

"Political uncertainty has returned and the yen's resurgence will serve as a clear profit-taking opportunity, especially after Monday's sharp run-up," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

"Stocks are not looking 'overbought' per se, but will react reflexively to the stronger yen, which has been its biggest single driver of late, he told Dow Jones Newswires.

The strong election showing in Italy of former premier Silvio Berlusconi's party battered the euro on Monday, with worries a new coalition government could weaken Rome's commitment to reforms.

US stocks closed sharply lower Monday, with the Dow Jones Industrial Average falling 216.40 points, or 1.55 per cent, to 13,784.17, the index's biggest single-day drop since November.