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Tokyo stocks open lower as cronyism scandal dogs PM

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An electronics stock indicator displays share prices of the Tokyo Stock Exchange on March 12, 2018. Tokyo shares jumped in early trade on March 12 as global investors cheered healthy US jobs data while the falling yen also lifted the Japanese bourse. / AFP PHOTO / Kazuhiro NOGI

Tokyo stocks opened lower on Monday with investor sentiment weighed down by political uncertainty as a cronyism scandal has sent the support ratings of Prime Minister Shinzo Abe’s cabinet plunging.

The benchmark Nikkei 225 index fell 0.40 percent or 86.13 points to 21,590.38 in early trade, while the broader Topix index was down 0.32 percent or 5.48 points at 1,731.15.

Abe and his Finance Minister Taro Aso have been in hot water in recent weeks amid a scandal over the cut-price sale of government land to a supporter of Abe to open an elementary school.

The finance ministry has admitted to altering documents related to the deal.

“There are growing voices that Abe and Aso should be held responsible,” said Masayuki Kubota, chief strategist at Rakuten Securities.

“Various polls have shown his cabinet approval rating plunging and the stable base of the Abe administration is wobbling,” he said in a commentary.

A weekend poll by the Asahi Shimbun daily found public support nosediving by 13 percentage points from a month ago to 31 percent, the lowest since Abe took power in December 2012.

Facing a grilling in a parliamentary hearing on Monday, Abe denied any involvement in the land deal or the alteration of the documents.

Kubota at Rakuten also said another concern for the stock market was a persistently weak dollar on fears of a trade war following US President Trump’s tariff plans and political uncertainty both in Japan and the United States.

The yen often draws safe-haven buying in times of uncertainty but a stronger currency hurts the nation’s exports.

The dollar was trading at 105.89 yen against 105.97 yen in New York on Friday.

Banks were lower with Mitsubishi UFJ Financial off 1.22 percent at 708.2 yen.

Honda fell 0.59 percent to 3,656 yen and Nintendo lost 0.89 percent to 48,550 yen.


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