Tokyo stocks fall as US-North Korea tensions rise
The yen jumped against the dollar -- a negative for Japanese shares -- as traders looked for safe investments after President Donald Trump vowed a devastating response to any escalation of North Korea's nuclear programme.? Photograph: (AFP)
Tokyo stocks dropped Wednesday morning as investors pressed the sell button in response to soaring tensions between the United States and North Korea.
The yen jumped against the dollar -- a negative for Japanese shares -- as traders looked for safe investments after President Donald Trump vowed a devastating response to any escalation of North Korea's nuclear programme.
"North Korea best not make any more threats to the United States," said Trump, who was speaking from his golf club in New Jersey. "They will be met with fire and fury like the world has never seen."
The US president's threat came after reports that North Korea has produced a nuclear warhead small enough to fit inside its missiles.
Trump's "wording was strong...prompting (investors) to shun risk, boosting the yen and pushing the stock market down", said Mari Iwashita, chief market economist at SMBC Friend Securities.
Tokyo's benchmark Nikkei 225 index dropped 1.28 per cent, or 256.13 points, to 19,739.88 by the break while the Topix index of all first-section issues fell 1.26 per cent, or 20.59 points, to 1,614.73.
In currency markets, the dollar dropped as low as 109.74 yen, its lowest in about two months, from 110.39 yen in New York and the upper half of the 110-yen range in Tokyo earlier Tuesday.
A rise in the yen, which often draws safe-haven buying in times of uncertainty, is a negative for Japanese exporters as it reduces their repatriated profits.
Toyota shares tumbled 1.83 per cent to 6,220 yen and Nintendo was off 1.54 per cent to end the morning at 37,600 yen.
Major bank Mitsubishi UFJ fell 1.35 per cent at 701 yen.
Struggling conglomerate Toshiba rose 4.27 per cent to sit at 293 yen on expectations that it will meet a deadline to submit long-delayed earnings to financial regulators, easing fears the embattled stock will be delisted from Japan's premier exchange.