Japanese shares went into freefall on Wednesday as Republican presidential candidate Donald Trump closed in on the White House. The benchmark Nikkei 225 index plummeted 5.4 percent, or 919.84 points, to close at 16,251.54 after a wild day of trading. The broader Topix index of all first-section issues dropped 4.57 percent, or 62.33 points, to 1,301.16.
A deeply divided electorate of about 200 million Americans was asked to make a momentous choice between electing the nation's first woman president, or handing the reins of power to a billionaire populist who has upended US politics with his improbable outsider campaign.
Clinton - the Democratic former first lady, senator and secretary of state - began the day as the narrow favourite to win the White House and become America's first female president. Markets had viewed Clinton as a safer bet. But as polls closed, Trump looked on course to win the White House, in a stunning upset with major implications for the world economy. "It was nothing but 'Trump risk' driving the market today," said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities. The wild moves on financial markets prompted the Bank of Japan, the Finance Ministry and the Financial Services Agency to hold an emergency meeting Wednesday afternoon.
Tokyo started the day in the black but quickly reversed course as Trump's stronger than expected showing stung the dollar and pushed up the yen - a negative for Japanese shares. The yen is seen as a safe haven in times of uncertainty. But a stronger currency is bad for Japanese exporters' profitability and tends to spark selling of their shares.
Exporters were hammered in Tokyo share trading, with Toyota tumbling 6.51 percent to 5,510 yen and Sony down 5.08 percent to 3,023 yen. Banking giant Mitsubishi UFJ Financial Group dropped 5.92 percent to 501.4 yen. Defense shares rose, however. Ishikawa Seisakusho, a machinery maker that depends heavily on defence ministry contracts, skyrocketed 14.33 percent to 694 yen while rifle ammunition maker Asahi-Seiki MFG was up 8.05 percent to 228 yen.
Comments
Comments are closed for this article.