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Overseas weakness, tensions extend to Nikkei

JIJI

Stocks lost further ground Tuesday, pressured by weaker overseas markets amid growing wariness over geopolitical risks.

The 225 issue Nikkei average closed down 93.91 points, or 0.69 percent, at 13,542.37. On Monday, the key market gauge dropped 24.27 points.

The Topix index of all first-section issues fell 5.98 points, or 0.52 percent, to end at 1,134.02, after shedding 1.63 points the previous day.

The Tokyo market opened lower on the heels of overnight declines in European and U.S. equities and the yen’s rise against the dollar and other major currencies, with the Nikkei average losing more than 100 points in early trading.

After the initial selling ran its course, the key indexes recovered gradually to end the morning session marginally higher.

But in the afternoon, the market headed south again and accelerated the downswing on index futures-led selling induced by poor performance of stocks in other Asian economies.

Uncertainties over the course of the U.S. Federal Reserve’s monetary policy continued weighing on the market, brokers said.

In addition, heightened tensions over the possible use of chemical weapons by the Syrian government against rebels have chilled investor sentiment globally, raising a risk-off mood, brokers said.

“The Tokyo market was swung wildly by computer-programmed transactions in thin trading due to a lack of fresh incentives,” said Yoshihiko Tabei, chief analyst at Kazaka Securities Co.

But Tabei said he does not expect the Nikkei average to fall well below 13,500, because trading has largely been made between 13,000 and 13,500 so far this year.

“Buying on dips is expected to prevent the key index from breaking the 13,000 line,” he added.

Decliners far outnumbered advancers 1,098 to 495 in the first section, while 158 issues were unchanged.

Volume rose to 1.713 billion shares from Monday’s 1.587 billion.

JGBs advance

Japanese government bonds advanced Tuesday as investors took heart from the day’s solid auction of a new 20-year JGB issue.

The lead September contract on 10-year JGBs finished up 0.24 point from Monday at 143.99. Volume grew to 23,116 contracts from 11,970.