Tokyo Stocks Fall Back amid Rekindled Risk-Averse Mood

Jiji Press

17:57 JST, March 16, 2023

TOKYO (Jiji Press) — Tokyo stocks suffered a setback Thursday as investors moved to sell risk assets amid rekindled jitters over a possible banking crisis.

The Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section gave up 218.87 points, or 0.8%, to finish at 27,010.61 after inching up 7.44 points Wednesday.

The key market yardstick temporarily stood below the psychologically important threshold of 27,000 for the first time since Jan. 23 on an intraday basis. The broader TOPIX index ended down 23.02 points, or 1.17%, at 1,937.10 following a 12.58-point gain the previous day.

Investors rushed to sell wide-ranging stocks from the outset after a plunge in Credit Suisse’s stock price Wednesday on news that its top shareholder has ruled out investing more money into the Swiss financial giant fueled fears of contagion from the collapse of U.S. lender Silicon Valley Bank spreading to Europe.

As the safe-haven yen was hunted against the dollar, stock selling gained momentum, especially for export-oriented issues.

The Nikkei average surrendered nearly 600 points in the initial wave of selling. But both the Nikkei and TOPIX indexes cut losses as Credit Suisse’s announcement of its plan to borrow up to 50 billion Swiss francs from the Swiss National Bank brightened investor sentiment to some extent.

The two indexes stayed in negative terrain for the rest of the day.

“Although Credit Suisse’s borrowing plan brought a sense of relief, anxiety about the overall financial markets remained strong,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

Maki Sawada, strategist at Nomura Securities Co., said that S&P Global Ratings’ lowering on Wednesday of its credit rating for San Francisco-based First Republic Bank to junk status was also behind the growing risk-averse mood.