Tokyo shares dropped 1.43 percent on Tuesday following a sharp fall on Wall Street overnight as renewed worries over the European debt crisis sent the Nikkei back below 10,000 points.
The headline Nikkei-225 index at the Tokyo Stock Exchange lost 143.61 points to close at 9,925.92. The Topix index of all first section shares fell 1.49 percent, or 12.97 points, to 857.19.
Tokyo followed US and European markets lower on worries that the eurozone debt crisis could spread to larger economies such as Italy and Spain, after both nations saw their borrowing costs soar on Monday.
Exporters such as Toyota, Sony and Canon fell as the euro sank against the dollar and yen.
“We need to be alert about the European debt problems even more than before,” Yutaka Yoshii, general manager at Mito Securities, told Dow Jones Newswires.
The euro traded at $1.3958 in Tokyo trade, slipping from $1.4029 in New York Monday and at one point hitting a four-month low of $1.3932. The euro bought 111.82 yen, falling from 112.51 in New York.
The single currency fell as eurozone finance ministers met in Brussels to discuss a new rescue package for Greece.
They said they would work to prevent the debt crisis from engulfing other economies and consider measures to “enhance” the European Financial Stability Facility, the 440 billion euro fund set up to lend to troubled members.
“It will take one or two years for the sovereign debt issues in Europe to be resolved,” Masayoshi Yano, a senior market analyst at Meiwa Securities, said.
“Market sentiment is fickle, switching back and forth between optimism and pessimism,” he added The Nikkei had posted a 2.73
percent gain over the past week.
Among major exporter shares, Toyota Motor lost 1.90 percent to 3,355, Sony fell 3.04 percent to 2,136 and Canon was down 1.81
percent at 3,795.
Honda Motor shed 2.46 percent to 3,170.
Banking issues also fell with Mitsubishi UFJ Financial Group off 2.93 percent at 397 yen and Sumitomo Mitsui FG down 2.14 percent at 2,466 yen. - Sapa-AFP