Nikkei Plunges amid Political Uncertainty in Japan

Tokyo, Oct. 14 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average plunged on Tuesday, weighed down by political uncertainty in the country and renewed trade friction between the United States and China. The Nikkei average temporarily lost over 1,500 points before closing at 46,847.32, down 1,241.48 points, or 2.58 pct, from Friday. The broader TOPIX index slid 63.60 points, or 1.99 pct, to 3,133.99. On Monday, the Tokyo market was closed for a national holiday. The market reopened on a dismal tone after Komeito announced after Friday’s market closing that it would dissolve its coalition with the ruling Liberal Democratic Party. The announcement came after the market’s recent rapid advance on expectations that new LDP leader Sanae Takaichi would implement an active fiscal policy if she is elected Japan’s prime minister. Komeito’s departure from the coalition cast doubt on whether she can become prime minister. “The continuation of the LDP-Komeito coalition had been the premise of the stock market’s advance,” said an official at an asset management company. “Now that it has collapsed, investors are waiting to see the framework of the next administration.” “The bad news came amid a sense of the market’s overheating, providing a good opportunity for correction,” said an official at a major brokerage firm, adding, “The uptrend in Japanese stocks has not necessarily changed.” Meanwhile, the Nikkei widened its losses on Tuesday afternoon, following media reports that China will take countermeasures against U.S. President Donald Trump’s plan to impose additional tariffs on Chinese products after China tightened its controls on rare earth exports. “The Tokyo market is facing problems at home and abroad,” said an official at a bank-affiliated securities firm. END [Copyright The Jiji Press, Ltd.]