Tokyo stocks close lower as virus worries linger

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Chart showing quarterly growth in Japan.Photo: AFPTokyo stocks closed lower Monday on worries over the spread of the new coronavirus in the country and the economy’s worst quarterly contraction in more than five years.

The benchmark Nikkei 225 index slipped 0.69 per cent, or 164.35 points, to end at 23,523.24, while the broader Topix index was down 0.89 per cent, or 15.10 points, to 1,687.77.

“US shares on Friday were mixed while the number of people infected with the new virus increased and the latest quarterly GDP was lower than expected,” Okasan Online Securities said in a commentary.

On Wall Street before the weekend, the benchmark Dow Jones Industrial Average closed down 0.1 per cent but the tech-rich Nasdaq climbed 0.2 per cent and the broad-based S&P 500 rose 0.2 per cent.

Compared with the US, “Japan is closer geographically and economically to China, and that’s causing concerns about the negative impact of the new virus on the economy and corporate performance,” said Masayuki Kubota, chief strategist at Rakuten Securities.

Dozens in Japan have so far been diagnosed with the virus, with Health Minister Katsunobu Kato warning on Sunday that the nation was “entering a new phase” of the outbreak.

Those concerns were exacerbated by the Japanese economy’s poor performance in the three months to December.

Gross domestic product shrank 1.6 per cent from the previous quarter, much worse than the one-percent contraction economists had expected, according to data released by the Cabinet Office.

The dollar fetched 109.83 yen in early Asian trade, against 109.74 yen in New York on Friday.

In Tokyo trading, sports shoe maker Asics lost 3.51 per cent to 1,371 yen following reports that the amateur section of the Tokyo Marathon, scheduled for 1 March, would be cancelled because of virus fears.

Some major exporters were lower, with Sony dropping 2.23 per cent to 7,452 yen and electronic parts maker Murata Manufacturing 2.31 per cent to 6,330 yen.

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