Markets

Japanese shares range bound amid Greek debt worries

TOKYO : Japanese shares were flat Friday morning, as investors continue to gauge the impact of growing fears surrounding

Published June 17, 2011 Updated June 17, 2011 06:50am

2 min

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By Syed Murtaza Gheblehzadeh

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The headline Nikkei-225 index at the Tokyo Stock Exchange edged down 0.60 points or 0.01 percent to 9,410.68 in the morning session. The Topix of all first section issues dropped 3.41 points or 0.42 percent to 809.00.

Overnight gains in US shares lifted sentiment, but the deepening fiscal and political troubles of Greece cast a shadow.

"Investors are not willing to buy actively in today's uncertain environment," said Hideyuki Ishiguro, a strategist at Okasan Securities.

Tension is building over Greece's debt woes, with one European analyst warning of a "Lehman Moment" for the eurozone, referring to US bank Lehman Brothers, whose 2008 collapse preceded the financial crisis.

In Athens Prime Minister George Papandreou appealed for unity from his own lawmakers Thursday after two deputies quit and the International Monetary Fund (IMF) insisted there can be no backsliding on agreed austerity measures.

Officials say they are confident eurozone finance ministers will agree at meetings Sunday and Monday on the disbursement of the latest slice of Greece's 110-billion-euro ($155 billion) bailout loan.

Analysts say any development in the Greek debt situation will hold the key to the Tokyo market's direction for the immediate future.

Many players kept their hands off the market as they also continue to assess the outlook for the US recovery.

"Until we can gauge the bottom of the US economic slump, there's not going to be a whole lot of enthusiasm for Japanese stocks," said Toshiyuki Kanayama, market analyst at Monex.

Toyota Motor edged up 0.16 percent to 3,200 in morning after it said production in the United States would normalise faster than expected following the massive disruption caused by Japan's March earthquake and tsunami.

Following large gains this week, Tokyo Electric Power (TEPCO) lost 9.38 percent to 290 on reports that a device to remove radioactive materials automatically stopped running Thursday evening at the Fukushima Daiichi nuclear complex because of leaking water.

Electronics giant Panasonic fell 0.96 percent to 927, telecom operator Softbank added 0.93 percent to 2,920 and precision equipment maker Olympus rose 2.03 percent to 2,711 while Nissan Motor gained 0.88 percent to 801.

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