Tokyo shares close down as ‘Trump risk’ scares investors

Tokyo shares closed lower Wednesday, extending a global selloff sparked by an opinion poll that put Donald Trump slightly ahead of his market-favoured Democratic rival Hillary Clinton in the US presidential race.

The ABC News/Washington Post tracking poll found Trump edging ahead of Democratic rival Hillary Clinton — by one point — for the first time since May.

Markets globally had been buoyed by a commanding lead for Clinton going into the November 8 vote but they have been jolted since news Friday that the FBI was again looking into her use of private emails while secretary of state.

The former First Lady is considered by most investors to be a safer, more stable bet than Trump, who is seen as a loose cannon.

“The Trump risk is in revival,” said Chihiro Ohta, a Tokyo-based senior strategist at SMBC Nikko Securities Inc.

“With Trump, there always follows an uneasiness over whether policies will be managed properly in the US, and given the holiday tomorrow in Japan, there’s no need to build positions at an uncertain time like this.”

Tokyo’s benchmark Nikkei 225 index lost 1.76 percent, or 307.72 points, to end at 17,134.68, while the Topix index of all first-section issues fell 1.78 percent, or 24.75 points, to 1,368.44.

Japan’s financial markets are closed Thursday for a public holiday.

The dollar plunged against the safe-haven yen on fears of a Trump win, trading at 103.79 yen on Wednesday against 104.82 when the Tokyo market closed on Tuesday.

A stronger yen eats into Japanese exporters’ profitability and usually pulls down the equities market.

Automaker Honda dived 3.45 percent to 2,973.5 yen and Nissan fell 2.38 percent to 1,042.5 yen.

Sony lost 2.15 percent to end at 3,265 yen after it reported a nearly 78 percent dive in half-year net profit on Tuesday.

Pharmaceutical giant Takeda closed down 2.12 percent at 4,609 yen. Trading was temporarily suspended earlier in the day following media reports that Takeda is in discussions with Valeant over buying the US firm’s Salix stomach drugs business.

The Wall Street Journal reported Valeant is in “advanced talks” with Takeda on the sale for about $10 billion.

“A major acquisition could be a negative for Takeda’s share price due to uncertainties over the near term,” Credit Suisse analyst Fumiyoshi Sakai said in a research note on Wednesday.

“Even if the acquisition is a good fit in strategic terms, it will take time to evaluate any synergies and get the two companies working together.”

— Bloomberg News contributed to this article —