Business

Nikkei falls 5.36% on Trump's shock win in U.S. election

Kyodo, Bloomberg

Financial markets were thrown into disarray in Tokyo on Wednesday as Republican candidate Donald Trump secured victory in the U.S. presidential race, with the Nikkei stock index nose-diving by 5.36 percent and yen briefly surging against the dollar to the 101 range.

Panicked investors rushed to unwind bets they had piled on amid pre-vote predictions Democratic candidate Hillary Clinton would win the presidency.

The 225-issue Nikkei stock average ended down 919.84 points from Tuesday at 16,251.54, its biggest one-day drop since June 24 when Britain voted to leave the European Union. The broader Topix index of all first section issues on the Tokyo Stock Exchange finished 62.33 points, or 4.57 percent, lower at 1,301.16.

Every industry category on the main section lost ground, led by transportation equipment, marine transportation and equipment issues.

Tokyo stocks were initially on a firm note on growing speculation of a win for Clinton.

But stocks gradually lost steam and fluctuated between gains and losses before turning sharply lower as results showing Trump taking key battleground states rolled in.

The Nikkei index shed more than 1,000 points at one point.

Meanwhile, the dollar briefly tumbled to the upper 101 range against the yen, dragging down Tokyo stocks. As of 5 p.m. in Tokyo, the dollar was trading at ¥103.32-33.

Chief Cabinet Secretary Yoshihide Suga hinted that the government may take steps to deal with currency market ruptures, saying he was seeing “speculative moves.”

Yutaka Miura, senior technical analyst at Mizuho Securities Co., said before Trump’s win was reported, “A ‘Trump shock’ has turned the market risk-off. Results are showing that he is doing much better than the markets had expected.”

Mari Iwashita, chief market economist at SMBC Friend Securities Co., said stocks were being sold off on speculation that Trump’s victory could create more uncertainty in the market given his messages and his “America First” stance. She added that removing the uncertainty injected into the market could take a while as investors do not know what to expect from his presidency.

On the TSE’s first section, declining issues outnumbered advancing ones 1,934 to 43, while nine ended the day unchanged.

The yen’s surge dragged down export-related names.

Toyota Motor Corp. sagged ¥384, or 6.5 percent, to ¥5,510, Nissan Motor Corp. dropped ¥62.20, or 6.0 percent, to ¥973.30 and Honda Motor Co. tumbled ¥232.50, or 7.8 percent, to ¥2,735.50.

Nikon declined ¥108, or 6.6 percent, to ¥1,539 after the precision machinery manufacturer on Tuesday cut its group net profit forecast, projecting a net loss for fiscal 2016.

Japan Petroleum Exploration shed ¥150, or 6.9 percent, to ¥2,036 after the oil developer downgraded Tuesday its profit projection for the current business year ending next March.

Trading volume on the main section rose to 3.8 billion shares from Tuesday’s 1.6 billion.