Nikkei stock index down 4% on stronger yen after Ishiba wins LDP race

TOKYO (Kyodo) — The Nikkei stock index sank over 4 percent early Monday, hit by selling of exporter and other issues after the yen strengthened following the victory of Shigeru Ishiba in the ruling Liberal Democratic Party’s leadership race late last week.

The Nikkei plunged after rising sharply Friday on speculation that his runoff opponent Sanae Takaichi, who advocates monetary easing, would win the election. Ishiba has said Japan’s monetary policy needs to be normalized and that financial income tax should be increased.

In the first 15 minutes of trading, the 225-issue Nikkei Stock Average fell 1,512.85 points, or 3.80 percent, from Friday to 38,316.71. The broader Topix index was down 73.85 points, or 2.69 percent, at 2,667.09.

On the top-tier Prime Market, decliners were led by real estate, transportation equipment and precision instrument issues.

The U.S. dollar was slightly stronger in the upper 142 yen range in early trading in Tokyo but largely remained weak after plunging by around 3 yen Friday when Ishiba won the LDP election, putting him on course to become Japan’s next prime minister.

At 9 a.m., the dollar fetched 142.79-80 yen compared with 142.15-25 yen in New York and 143.18-21 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1168-1169 and 159.47-49 yen against $1.1160-1170 and 158.72-82 yen in New York and $1.1132-1133 and 159.40-44 yen in Tokyo late Friday afternoon.