Tokyo stocks extend losses as oil glut sees risk averse investors pile into yen

Tokyo stocks extended losses for a third day Thursday as a recent oil glut triggering concerns about the health of the global economy sent investors fleeing from riskier assets like stocks and into safe havens like the yen.

The 225-issue Nikkei Stock Average fell 254.52 points, or 1.32 percent, from Wednesday to end at a five-week closing low at 19,046.55, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 15.23 points, or 0.98 percent, to finish the day at 1,540.35.

Local brokers said that when investors opt for safe-haven currency options like the yen, it pushes its value up versus its major counterparts and in doing so negatively impacts Japan's mainstay exporter companies, who rely on a weaker yen to boost their competitiveness and profits made in overseas markets.

They added that that bellwether exporter shares losing ground, tends to drag the broader market lower and, of notable decliners Thursday, rubber products, financing business and precision instrument-related stocks lost significant ground.

The turnover was 2,191.3 billion yen (18.00 billion U.S. dollars). Endit