Nikkei plunges amid growing tensions over Syria


The Nikkei 225 average plunged to a two-month closing low Wednesday, dampened by falls in overseas markets and a strengthening of the yen in response to growing geopolitical concerns over Western military intervention in Syria.

The Nikkei closed down 203.91 points, or 1.51 percent, at 13,338.46, its lowest finish since June 27, extending its losing streak to a third day.

The Topix also retreated for the third straight day, ending 19.99 points, or 1.76 percent, lower at 1,114.03.

Stocks met with selling across the board after the European and U.S. equity markets declined overnight and the yen drew safe-haven buying to rise to around 97 against the dollar amid growing expectations that the United States and allies are set to launch military intervention in Syria, market sources said.

The Nikkei briefly fell more than 350 points in the early afternoon, led by selling of index futures.

The key yardstick pared part of the losses later thanks to buybacks as the yen eased somewhat.

Concerns over the possible military strike against Syria undermined investor sentiment, prompting selling of not only export-oriented issues but also domestic demand-related stocks, brokers said.

“Investors are worried that the possible action could worsen the U.S. fiscal situation at a time when U.S. federal debt is close to the ceiling,” said Kenichi Hirano, an adviser and market analyst at Tachibana Securities Co.

Most market players expect any military action against Syria would be short-lived.

But if such action is prolonged, the U.S. budget deficit could worsen and have a negative impact on the economy and Wall Street, brokers said.

Losers trounced winners 1,565 to 137 on the first section, while 44 issues were unchanged. Volume rose to 1.979 billion shares from Tuesday’s 1.713 billion.

JGBs move higher

Japanese government bonds rose further Wednesday thanks to safe-haven buying sparked by growing tensions over Syria.

The lead September contract on 10-year JGBs finished up 0.30 point from Tuesday at 144.29. Turnover grew to 24,237 contracts from 23,116.

In late interdealer trading in cash JGBs, the yield on the latest 329th 10-year issue with a 0.8 percent coupon stood at 0.720 percent, down from 0.740 percent late Tuesday.