TOKYO: Tokyo stocks fell 0.42 percent Tuesday morning with investors watching developments in Greece and Italy as new leaders there look to implement key economic reforms to tackle their debt crises.
The Nikkei 225 index at the Tokyo Stock Exchange dropped 36.28 points to 8,567.42 by the lunch break. The Topix index of all first-section issues sagged 0.33 percent, or 2.41 points, to 733.44.
Investors are likely to wait and see how new Italian and Greek leaders will undertake necessary fiscal reforms, said Kenichi Hirano, operating officer at Tachibana Securities.
"As new governments start, no storm is expected at least for now," he told Dow Jones Newswires.
"Still, nothing has changed yet," he said of the sovereign debt crisis that has embroiled eurozone nations.
Greece's new Prime Minister Lucas Papademos said Monday his interim government would focus on implementing a European debt rescue deal, warning that failure to do so could force the country out of the eurozone.
In Italy, Mario Monti, nominated to replace Silvio Berlusconi as prime minister, warned there could be "sacrifices" ahead and asked investors to be patient as he scrambled to put together a cabinet.
Sony dropped 1.60 percent to 1,351 yen, while Sumitomo Mitsui Financial Group gained 2.51 percent to 2,118 yen after announcing a share buyback plan.
Scandal-tainted Olympus was bid-only at 640 yen indicated value versus Monday's close at 540 yen on optimism it would meet a December 14 deadline to report its earnings and avert delisting.
The Tokyo Stock Exchange last week warned that Olympus would be removed frmo the index if it did not file its already delayed earnings on time as the precision equipment maker grapples with a fee payment scandal.
The euro bought $1.3627 and 105.00 yen in Asian morning trade, hardly changed from $1.3629 and 105.07 yen in New York late Monday.
The dollar was at 77.05 yen, compared with 77.09 yen.
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