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Tokyo stocks close sharply lower as tax hike delay, Brexit concerns sends yen higher

Xinhua, June 2, 2016 Adjust font size:

Tokyo stocks closed sharply lower Thursday as the yen's appreciation against the U.S. dollar, jitters about Japan's delay to a planned consumption tax hike and nerves over Britain's possible exit from the European Union weighed heavily on investor sentiment.

The 225-issue Nikkei Stock Average dropped 393.18 points, or 2.32 percent, from Wednesday to end the day at 16,562.55.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, fell 30.26 points, or 2.22 percent, to close at 1,331.81.

With investors also in a wait and see mood ahead of key employment data for May due from the U.S. on Friday, coupled with the June 23 referendum in Britain on whether or not it will leave the EU, investors dumped riskier assets like stocks and piled into the yen as a safe haven, forcing its value up versus a basket of other currencies.

Local brokers also said that Prime Minister Shinzo Abe flip-flopping again on a tax hike pledge, against the better judgement of economists and the International Monetary Fund, also had investors spooked about the current and future health of the economy and whether Abe has any ammunition left in his economic policy arsenal to make any tangible improvements.

The majority of industry categories on the main section closed in negative territory on Thursday, with insurance, iron and steel, and banking-linked issue logging the biggest retreats.

Trading volume on the main section increased to 2,075.08 million shares from Wednesday's volume of 1,995.28 million shares, with declining issues trouncing advancing ones by 1,773 to 139.

The day's turnover was 2,093.0 billion yen (19.16 billion U.S. dollars). Endit