AFP, Tokyo :
Tokyo investors will keep a close eye on geopolitical developments next week after the Japanese market tumbled Friday following US President Barack Obama’s announcement that he had authorised air strikes on Iraq.
“It was panic selling,” said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.
“I bet market players will now start bargain buying, but it’s unclear when that’s going to happen. They’ll be paying closing attention to markets overseas as well as the situation in Iraq.”
Also in focus would be second-quarter Japanese economic growth figures, which are expected to weaken from previous months after an April sales tax hike dented consumer spending.
On Friday, the Nikkei 225 index dived 454.00 points to 14,778.37, the lowest close since late May, as Obama’s comments sparked a sharp uptick in the yen, which is bad for Japanese shares. The benchmark index lost 4.80 percent over the week.
The broader Topix index of all first-section shares fell 2.37 percent, or 29.86 points, to close at 1,228.26. It lost 4.14 percent over the past five sessions.
The Nikkei’s tumble under the psychologically important 15,000 level came after a fall on Wall Street and as the soaring yen-a safe-haven currency in times of turmoil or uncertainty – – dragged the Japanese market into negative territory.
Obama announced that he had authorised US air strikes on Iraq and humanitarian supply drops to prevent a “genocide” by Islamist extremists against minorities.
But the US leader, who was an outspoken critic of his predecessor George W. Bush’s 2003 invasion of Iraq, said he was not sending any ground forces back to the troubled country.
The dollar at one stage sank as low as 101.58 yen, compared with 102.09 yen in New York Thursday, while the euro dropped to 135.93 yen from 136.42 yen.
A stronger yen is bad for Japanese exporters as it digs into their profitability and makes them less competitive overseas.
Wall Street finished lower Thursday as advances by jihadists in Iraq trumped encouraging employment data and spurred talk of possible US military action.
In Tokyo, camera maker Nikon’s shares plunged 9.37 percent to 1,435.5 yen after it said Thursday its quarterly net profit had dropped sharply from a year ago.
SoftBank fell 3.40 percent to end at 6,801.0 yen with its chief Masayoshi Son scheduled to hold an earnings-related news conference Friday, after an apparently bungled effort by US unit Sprint to take over rival T-Mobile.
SoftBank said its net profit had dropped 70 percent in the latest quarter from a year ago. The announcement came after markets had closed.
Also Friday, the Bank of Japan held fire on expanding its vast stimulus programme, saying the world’s number three economy continued to recover, even as the country’s export and factory output picture worsened.
