Tokyo Stocks Extend Losses after 2 U.S. Banks Go Bust

Jiji Press

17:18 JST, March 13, 2023

TOKYO (Jiji Press) — Tokyo stocks sank deeper on Monday, amid a risk-averse mood spurred by two U.S. bank failures.

The Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section gave up 311.01 points, or 1.11%, to finish at 27,832.96, after losing 479.18 points Friday.

The broader TOPIX index ended down 30.59 points, or 1.51%, at 2,000.99, following a 39.51-point drop the previous trading day.

Hefty selling hit wide-ranging stocks from the outset after all three key U.S. stock indexes went further north Friday in the wake of the collapse of Silicon Valley Bank, seen as the largest bank failure since the 2008 financial crisis in terms of asset holding.

In particular, investors flock to sell bank stocks also given the news Sunday that New York state regulators have shut down Signature Bank and put it under their control.

The two U.S. bank failures led to the dollar’s drop against the yen. As a result, mainly export-oriented shares were battered.

The market remained under strong selling pressure in the afternoon. But it managed to recoup part of the early morning losses aided by rising U.S. stock index futures in premarket trading.

Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc., observed that SVB went under as unrealized losses on its long-term U.S. Treasury bond holdings ballooned due to Treasury price drops caused by the Federal Reserve’s interest rate hikes.