Tokyo shares down 0.86pc by noon

TOKYO: Tokyo shares lost 0.86 percent Monday morning as concerns over eurozone financial stability persisted, with the euro falling against other major currencies.

The Nikkei-225 index lost 83.53 points to 9,595.18. The Topix index of all first-section issues dropped 0.85 percent or 7.06 points to 826.14.

"This is not a problem of Greece alone so there are growing (debt) concerns about the other bigger euro economies," Hiroichi Nishi, general manager at SMBC Nikko Securities, told Dow Jones Newswires.

On Friday, US shares tumbled after Italian bank stocks fell suddenly on warnings of a possible downgrade by ratings agency Moody's and yields on Italian government bonds surged, sparking fear that the eurozone's debt troubles could be spreading.

"We have seen this pattern before of Greece's debt problems spilling over into neighbouring countries such as Spain and Italy so we still need to be cautious about Europe's sovereign debt risk," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

The euro was hovering around 114.00 yen in Tokyo morning trade, down from 114.10 yen in New York late Friday.

Major exporters fell, with Sony off 1.78 percent at 2,040 yen and Toyota down 2.13 percent at 3,215.

The fresh jitters from Italy, combined with ongoing worries about whether Greece can avoid a potentially destabilising default, overshadowed upbeat economic reports from the United States on Friday.

Investors are looking ahead to US economic data, including personal income and consumption numbers due later Monday, as well as the Bank of Japan's quarterly "tankan" business sentiment survey slated to be released on Friday.

Tokyo Electric Power Co. shares were 3.89 percent higher 320 yen after rising as high as 334 in early trading. TEPCO was due Monday to start reusing contaminated water as a coolant at its damaged Fukushima Daiichi nuclear plant.

Short-term investors bought the stock in the view the plan represents a step toward resolving the ongoing crisis that has seen TEPCO lose 85 percent of their pre-March 11 quake levels.

"TEPCO stock is cheap, but the probability is low that any value will be left for equity holders after compensation is paid, as well as interest on loans and bonds," said Adam Fisher, CIO of Los Angeles-based Commonwealth Opportunity Capital, a hedge fund.

Copyright AFP (Agence France-Presse), 2011