Tokyo investors eye geopolitical tensions this week

Tokyo investors will be keeping an eye on simmering geopolitical tensions this week in the aftermath of a Malaysia Airlines jet crash in Ukraine. Fresh economic data, including Japanese trade figures for June, will also be on investors’ radar screens after the Japanese government raised its view of the economy for the first time in six months last week. On Friday, Tokyo stocks closed 1.01 per cent lower as the crash of a Malaysia Airlines plane in war-wracked Ukraine sent jitters through the market, with shares of major Japanese carriers falling. The downing of the MH17 Flight with 298 people aboard added further tragedy to bristling tensions between Western nations and Russia over the issue of separatists in the eastern European nation.
- 'Geopolitical risks' -
Separately, Israel launched a ground invasion of Gaza, sending thousands of troops into the Palestinian territory. ‘Everyone was compelled to think about the geopolitical risks they had forgotten about for a while,’ Hiromichi Tamura, chief strategist for Japan at Nomura Securities, said. But Tamura said he did not expect the situation as it stands to lead to any shock to the broader financial system or a jump in crude oil prices big enough to hit the global economy. Hideyuki Ishiguro, senior investment strategist at Okasan Securities, also said: ‘The Russia-Ukraine situation and the Gaza invasion aren't likely to negatively affect the (global) economy,’ also adding Japanese retail investors are eager to buy domestic stocks on dips. Japan’s two biggest airlines closed with modest losses. All Nippon Airways (ANA) fell 0.80 per cent to 246 yen while Japan Airlines (JAL) was 0.66pc lower at 5,940 yen. Both carriers said they do not operate flights over Ukrainian airspace. Embattled electronics maker Sharp fell 2.13 per cent to 321 yen after the Mainichi newspaper said it would report a net loss in the April-June quarter owing to one-time losses linked to the restructuring of its European solar power business. Fujitsu rose 1.82 per cent to 782 yen after the leading Nikkei business daily reported it planned to withdraw from semiconductor manufacturing. The yen, considered a safe haven in times of turmoil, was a touch lower against the dollar but still up from Thursday’s levels. The dollar was buying 101.32 yen in Tokyo afternoon trade, against 101.17 yen in New York but still down from 101.51 yen earlier Thursday in Tokyo, according to AFP.