Business / Financial Markets

Nikkei tumbles on fears of Tokyo coronavirus lockdown

Kyodo, Reuters

Tokyo stocks fell Monday, with the benchmark Nikkei sinking over 800 points at one point as a sharp rise in coronavirus infections in Tokyo stoked fears that the metropolitan government may halt economic activities in the capital to prevent a further escalation of the pandemic.

Meanwhile, the U.S. dollar dropped against the yen into the lower 107 range due to major central banks increasing global dollar liquidity, adding extra pressure on export-related issues, dealers said.

The 225-issue Nikkei average ended down 304.46 points, or 1.57 percent, from Friday at 19,084.97. The broader Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 23.95 points, or 1.64 percent, lower at 1,435.54.

Every industrial category was down, with major decliners including air transportation, bank and machinery issues.

"Fears about a further escalation of an economic fallout are deepening, while the view that Tokyo may follow other large cities in the world and implement a lockdown is becoming more realistic," said Maki Sawada, vice president of the investment research and investor services department at Nomura Securities Co.

Across the country, there were more than 100 confirmed infections a day during the three days through Sunday, with a large proportion of them in Tokyo and its neighboring prefectures.

Selling of shares accelerated in the morning after news of the death of Ken Shimura, 70, a popular comedian, due to the coronavirus reminded market players of the imminent threat of the pandemic, brokers said.

U.S. President Donald Trump on Sunday extended his stay-at-home guidelines until the end of April, dropping his earlier plan to get the economy up and running by mid-April after a top medical adviser said more than 100,000 Americans could die.

British authorities warned that lockdown measures could last months, while Japan is reportedly set to expand its entry ban to include citizens traveling from the United States, China, South Korea and most of Europe.

Prime Minister Shinzo Abe on Saturday promised an unprecedented package of steps, saying the country was close to a national emergency as infections surged.

All 33 sector subindexes on the TSE were in negative territory, with air transport, banking and warehouse and wharf being the worst three performers.

As Tokyo moves closer toward a potential citywide lockdown, shares of food companies bucked the overall weakness.

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