Japanese shares close down 1.69pc

TOKYO: Tokyo shares closed down 1.69 percent Thursday dragged by weak US economic data and domestic political uncertainty with the prime minister facing a no-confidence vote.

The benchmark Nikkei index lost 164.57 points to close at 9,555.04. The Topix index of all first-section issues was down 1.63 percent, or 13.65 points, at 825.76.

Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Dow Jones Newswires that the market was filled with negative factors.

"The US data were atrocious, China still seems on course to raise rates in June, Moody's cut its rating on Greece, and Japan's politics is in shambles," he said.

In New York on Wednesday the Dow Jones Industrial Average dropped 279.14 points (2.22 percent) to 12,290.65 with worries sparked by a weak jobs report from payrolls firm ADP and grim manufacturing numbers.

At home embattled Prime Minister Naoto Kan offered to step down once the country has recovered from the March 11 quake and tsunami in a concession to his enemies ahead of the no-confidence vote.

However, Hiroichi Nishi, general manager of the equity division at SMBC Nikko Securities, said: "Even though he indicated his intention to resign, it's unclear when Kan will actually do so."

It remains unclear how long it will take to get the nuclear crisis under control, he added.

The result of the vote announced after the market close showed Kan survived the motion brought against him by the conservative opposition.

Shares in Tokyo Electric Power, the operator of the Fukushima Daiichi nuclear power plant battered by the March 11 quake-tsunami, closed up 2.00 percent at 305 yen after hitting an all-time low of 282 yen.

TEPCO shares turned up amid prospects of voting down the no-confidence motion and Kan's remarks seeking to control the current nuclear crisis.

"There must be some sense of relief that a TEPCO support scheme will likely be formed," Nishi said.

Automakers were mostly down following dismal US sales for May, with Toyota Motor falling 3.25 percent to 3,270 yen.

Copyright AFP (Agence France-Presse), 2011