Stocks lost ground in Tokyo on Tuesday due to growing geopolitical concerns following a North Korean missile launch.
The Nikkei 225 average shed 87.35 points, or 0.45 percent, to end at 19,362.55. On Monday, the key market gauge fell 2.71 points.
The Topix, which covers all first-section issues, closed 2.36 points, or 0.15 percent, lower at 1,597.76 after gaining 3.13 points Monday.
The Nikkei opened lower amid a risk-averse mood following the news that the North Korean missile, launched hours before the opening bell, fell into the Pacific Ocean about 1,180 km east of Cape Erimo in Hokkaido after flying over the Oshima Peninsula.
A wide range of issues met with selling as investor sentiment was also battered by the yen’s rise against the dollar, which was prompted by the missile launch, market sources said.
The Nikkei fell about 170 points briefly in early trading.
With the risk-off sentiment receding somewhat later, however, some stocks attracted buybacks, helping underpin the overall market, brokers said.
“Although the missile launch created a risk-off mood in the market, traders stayed calm to a certain extent,” with no “panic selling” taking place, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
Market players will be paying close attention to high-ranking U.S. government officials’ possible comments on the North Korean missile firing as clues for Wednesday’s trading, he added.
Hiroaki Hiwada, a strategist at Toyo Securities Co., indicated that the market is unlikely to regain steam even if closely watched economic data, including a U.S. jobs report for August due out Friday, show good results, after the risk-averse mood related to North Korea potentially diminishes.
But Tokyo stocks “will not fall substantially” in light of the good economic fundamentals, Hiwada said, adding that the Bank of Japan’s purchases of exchange-traded funds will help prop up the market. The Nikkei is likely to stay around 19,300 for the time being, he said.
Falling issues outnumbered risers 989 to 881 on the first section, while 144 issues were unchanged.
Volume inched up to 1.387 billion shares from Monday’s 1.344 billion.
Clothing store chain operator Fast Retailing, major retailer FamilyMart Uny Holdings and convenience store operator Ministop were downbeat as they went ex-dividend.
Askul lost ground after the online stationery seller announced disappointing August sales data.
By contrast, defense equipment-related Ishikawa Seisakusho and Howa Machinery were hunted, reflecting the growing geopolitical tensions over North Korea.