TOKYO: Japanese stocks opened lower Monday after France and other European nations saw their credit ratings downgraded last week.
The Nikkei index at the Tokyo Stock Exchange fell 1.23 percent or 104.74 points to 8,395.28 in the first minutes of trade.
The index stabilised after the opening tumble, said Tachibana Securities operating officer Kenichi Hirano.
Global markets are expected to face pressure when they reopen Monday after Standard & Poor's stripped France and Austria of their top triple-A ratings and downgraded a swathe of debt-laden EU members.
Friday's downgrades had been mostly anticipated, but analysts said the move showed the eurozone debt crisis was worsening.
Only Germany escaped unscathed as all other eurozone members were either downgraded -- some by two notches -- or else warned their current ratings were being re-examined.
Bank of Japan governor Masaaki Shirakawa said Monday the European sovereign debt problem was the biggest risk to the Japanese economy, Dow Jones Newswires and the business daily Nikkei reported.
The dollar was at 76.89 yen in early Asian trade, edging up from 76.83 in New York late Friday.
The euro bought $1.2652 and 97.26 yen, compared with $1.2624 and 97.20 yen in New York.
The Dow Jones Industrial Average lost 0.39 percent to close at 12,422.06 Friday.
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