Tokyo shares open lower after Wall Street slip

TOKYO: Tokyo stocks opened lower on Tuesday following losses overnight on Wall Street sparked by renewed coronavirus fears as Japan prepares for the opening of the Olympics.

The benchmark Nikkei 225 index dropped 0.87 percent, or 241.56 points, to 27,411.18 in early trade. The broader Topix index lost 0.90 percent, or 17.23 points, to 1,889.90.

The Tokyo market's dip came after global shares dropped as investors fretted about the further spread of the virus and the economic impact of the pandemic.

The Dow lost 2.1 percent, while the Nasdaq gave up 1.1 percent.

Tokyo stocks close down for third straight session

The dollar stood at 109.54 yen, slightly higher from 109.46 yen on Monday in New York.

"After falls of US shares overnight, today's Tokyo market seems to have no choice except to go south," Okasan Online Securities said in a commentary.

Tokyo investors are shying away from making major bets this week, ahead of a four-day weekend from Thursday, with the Tokyo Olympics starting from Friday.

Market participants are also starting to voice a wide range of worries about Tokyo shares going forward, including political uncertainty after the Olympics.

The unclear economic outlook was also weighing on manufacturers' shares.

After the Olympics, the ruling Liberal Democratic Party will hold a leadership election, with public support for Prime Minister Yoshihide Suga low and still falling.

While there is no clear rival candidate to Suga, the outlook of the leadership race is less certain than before with LDP lawmakers jittery about Suga's sagging popularity ahead of a national election scheduled after the Olympics.

"The current situation is not conducive to encouraging bargain-hunting," Okasan said.

Among major shares, Olympic sponsor Toyota fell 1.21 percent to 9,622 after the automaker said it would not air Olympic-related television ads in the domestic Japanese market, where support for the Games remains low.

Sony fell 2.24 percent to 10,685 yen. Uniqlo operator Fast Retailing fell 0.82 percent to 76,030 yen.

High-tech investor SoftBank Group fell 1.47 percent to 7,234 yen. Nintendo lost 1.35 percent to 60,460 yen.