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Stocks close 1.09% lower

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Tokyo shares slipped 1.09% Monday as the yen strengthened on worries over the escalating crisis in Iraq.

The benchmark Nikkei 225 index lost 164.55 points to finish at 14,933.29, while the Topix index of all first-section shares fell 0.75%, or 9.29 points, to 1,234.68.

"The market is short-term overbought," said Yoshihiro Okumura, general manager at Chibagin Asset Management.

"There isn't too much we can expect from a domestic investor-centred rally," he added. "But recent Nikkei performances have been encouraging. If and when foreigners do return, the effect will likely be dramatic."

Sentiment took a hit as investors nervously track events in Iraq -- where Islamic militants are sweeping though the country, taking over key cities and moving towards Baghdad as U.S.-trained Iraqi forces crumble.

Markets were also jittery as Europe faced gas supply disruptions Monday after Ukraine failed to broker an 11th-hour deal with Russia in a feud that has stoked the worst East-West crisis since the Cold War.

Ukraine hosted the last-gasp talks hoping to keep an energy shortage from compounding the new pro-Western leaders' problems as they confront a two-month separatist insurgency threatening the survival of the former Soviet state.

The geopolitical jitters pushed currency traders into the yen, a safe haven during times of uncertainty and turmoil.

In foreign exchange trade, the dollar weakened to 101.76 yen from 102.04 yen in New York Friday. A stronger yen is negative for exporters' shares as it hurts their profitability.

© (c) 2014 AFP

©2021 GPlusMedia Inc.

2 Comments
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Right now, Abenomics, DOW JONES and the crisis in Iraq are the biggest concern for Nikkei 225. Since Domestic Investors cannot deal the massive selling from Foreign Investors, right now, it is best to wait-and-see the situation before we could continue investing.

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FangWannasiri - your advice is tantalizing (or maybe its just your profile photo).

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