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Tokyo shares tumble as metropolitan gov't tightens grip over virus

This file photo taken on Oct. 26, 2017, shows an electronic stock quotation signboard at the Tokyo Stock Exchange in the Japanese capital. (Kyodo)

TOKYO (Kyodo) -- Tokyo shares tumbled Thursday, with the benchmark Nikkei dropping over 1,000 points at one point, as the capital and its neighboring cities accelerated efforts to contain the new coronavirus, stoking fears of an economic slowdown.

    The market was impacted by the news that the number of confirmed infections in Tokyo spiked by 41 on Wednesday, the largest single-day jump, bringing the total to 212. The total almost doubled in a week, with retail and service sector issues taking a hit amid fears of a potential lockdown in one of the world's largest cities.

    Investors were also quick to lock in profits by unloading issues that had notably recovered from an earlier global market rout due to the outbreak, including iron and steel and marine transport stocks.

    The 225-issue Nikkei Stock Average ended down 882.03 points, or 4.51 percent, from Wednesday at 18,664.60. The broader Topix index of all First Section issues on the Tokyo Stock Exchange snapped its six-day winning streak, ending 25.30 points, or 1.78 percent, lower at 1,399.32.

    In the currency market, the U.S. dollar lost ground against the yen, which drew demand from Japanese companies that will close their books for the fiscal year ending Tuesday, dealers said.

    At 5 p.m., the dollar fetched 110.47-49 yen, compared with 111.16-26 yen in New York and 111.46-47 yen in Tokyo at 5 p.m. Wednesday.

    The euro was quoted at $1.0924-0926 and 120.68-72 yen against $1.0874-0884 and 121.08-18 yen in New York and $1.0806-0809 and 120.46-50 yen in Tokyo late Wednesday afternoon.

    Investors fled to the relative safety of government bonds amid uncertainty over the pandemic, leading the 10-year yield to fall 0.025 percentage point from the previous day to 0.005 percent. Bond yields move inversely to prices.

    Shares extended losses after concerns over the rapidly increasing number of infections in Tokyo prompted its surrounding prefectures to meet the metropolitan government's request and ask their residents to refrain from traveling to the capital this weekend, brokers said.

    The move "reminded investors that Tokyo might follow other large cities in the world in imposing a virtual lockdown, which would devastate Japan's economy," said Shingo Ide, chief equity strategist at the NLI Research Institute.

    While stressing it is not the time yet to announce a citywide lockdown, Tokyo Gov. Yuriko Koike told a press conference Wednesday that the city is in an important phase to prevent an explosive rise in the number of infections.

    Market players were also awaiting U.S. unemployment benefit application data due later in the day to gauge the impact of the epidemic on the world's largest economy.

    On the First Section, declining issues outnumbered advancers 1,226 to 897, while 45 ended unchanged.

    Trading volume on the main section fell to 2,049.67 million shares from Wednesday's 2,280.28 million shares.

    Marubeni slid 73.50 yen, or 11.8 percent, to 550.10 yen after the trading house on Wednesday cut its earnings estimate and projected a group net loss for fiscal 2019 on the global economic slowdown and lower commodity prices due to the outbreak.

    TDK slumped 780 yen, or 8.7 percent, to 8,170 yen after the electric component supplier also revised down its profit estimate, citing a negative impact from the epidemic.

    Among retailers, Fast Retailing, the operator of the Uniqlo casual clothing chain, plunged 6,640 yen, or 13.2 percent, to 43,800 yen while department store operator Isetan Mitsukoshi Holdings sagged 42 yen, or 6.0 percent, to 657 yen.

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