Tokyo shares end down 0.85pc

TOKYO: Tokyo stocks fell 0.85 percent to their lowest finish in more than two weeks Tuesday with a strong yen denting exporters after fears that eurozone and US debt problems could trigger a fresh global crisis.

The benchmark Nikkei index shed 84.75 points to 9,889.72, closing below 9,900 for the first time since July 1. The Topix index of all first-section issues dropped 0.65 percent, or 5.61 points, to 853.75.

The dollar was flat at 79.02 yen, with the Japanese unit's strength weighing on Canon, which fell 2.77 percent to 3,680 yen, and Sony, which slipped 2.47 percent to 2,088.

Elpida Memory plunged 4.24 percent to 721 yen amid concerns over its ability to make money in the intensely competitive computer memory chips market, said Takuya Yamada, a senior portfolio manager at ITC Investment Partners.

Investrust chief executive Hiroyuki Fukunaga told Dow Jones Newswires "the persistently strong yen is threatening an anticipated V-shaped recovery in the second half of the year" as exports are a key driving force for the recovery.

In New York on Monday the Dow Jones Industrial Average fell 92.34 points, or 0.74 percent, to close at 12,387.39.

Top Democratic and Republican senators were struggling to forge a compromise deal to raise the federal government's debt ceiling by August 2 in order to avert a potentially disastrous default.

On the other side of the Atlantic, the eurozone's leaders were preparing for an emergency summit on Thursday aimed at preventing a default by Greece, which could have destabilising effects on larger European economies.

Banks fell on profit taking and utilities also faced selling pressure amid mounting concerns over electricity shortages in Japan, said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.

Kansai Electric Power tumbled 3.26 percent to 1,393 yen after the utility halted operations at one of its nuclear reactors due to a cooling system problem, leaving 18 of Japan's 54 reactors in operation.

Mitsubishi UFJ Financial Group lost 2.54 percent to 383 yen and Sumitomo Mitsui Financial Group was down 1.27 percent at 2,404 following losses in US and European financial shares on concerns last week's "stress tests" on European lenders were not stringent enough, dealers said.

Nippon Meat Packers tumbled 4.16 percent to 1,082 to 1,079 and Itoham Foods slid 3.02 percent to 321 as consumer demand for meat is expected to weaken due to concerns over radioactive contamination in beef.

Amid the downtrend, companies linked to Japan's World Cup winning women's football team drew buying interest.

Sporting goods maker Mizuno rose 1.33 percent to 379 yen. Plenus, a food chain operator and official sponsor, gained 1.23 percent to 1,390.

Copyright AFP (Agence France-Presse), 2011