TOKYO: Tokyo stocks slumped more than two percent in early trade Monday, extending a rout in world equity markets as investors worried about global growth and the upcoming British vote on European Union membership.
The yen rose after sentiment darkened following the weekend assault on a gay nightclub in Florida that left 50 dead and 53 injured.
Investors were now focusing on the Brexit vote later this month and policy meetings this week by the Federal Reserve and Bank of Japan (BoJ), analysts said.
They will be looking to the Fed and BoJ for insight on their plans for monetary policy, including US interest rates and possible Japanese economic stimulus.
“The risk-off stance will continue this week ahead of a multitude of events,” Bernard Aw, a Singapore-based strategist for IG, told Bloomberg News.
“The Fed and BoJ meetings as well as the Brexit vote next week will set the tone for financial markets.”
In early trade, Tokyo’s benchmark Nikkei 225 index shed 2.01 percent, or 333.33 points, to 16,268.03, continuing its slump after ending two straight sessions in negative territory.
The broader Topix index of all first-section shares lost 2.11 percent, or 28.04 points, to 1,302.68.
On currency markets, the yen gained as investors shifted into safer investments with the dollar at 106.56 yen, down from 106.93 yen Friday in New York.
A stronger yen is bad for Japanese stocks as it shrinks the value of exporters’ repatriated profits.
In share trading, Toyota slipped 1.83 percent to 5,524 yen and industrial robot maker Fanuc was 1.40 percent off at 16,495 yen.
And Japan’s benchmark 10-year bond yield fell to a record low of minus 0.165 percent, on concerns about the world economy. Bond prices and yields move in opposite directions.
