TOKYO: Tokyo stocks fell 2.26 percent Monday morning as exporters tumbled on a weaker euro amid fears of a default by Greece and concerns over the European economy.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange dropped 196.41 points to 8,503.88 by the lunch break. The Topix index of all first-section issues sank 20.71 points or 2.72 percent to 740.46.
Exporters fell on concerns about the European economy following a jump in the eurozone's annual inflation rate for September.
Greece also said Sunday that its budget deficit should drop to 8.5 percent of GDP in 2011 from 10.5 percent last year, short of a 7.4-percent target initially fixed in June.
The announcement deepened fears of a default as the target had been set by European leaders as part of its bailout deal.
The euro fell to $1.3351 in Tokyo morning trade from $1.3451 in New York late Friday and to 102.83 yen from 103.12 yen.
Sony plunged 5.77 percent to 1,420 yen and Nissan slipped 2.16 percent to 678 yen.
"The outlook for Japanese equities remains uncertain due to the cloudy global economic conditions, European debt problems and the sharp appreciation in the yen," said Hiroichi Nishi, general manager at SMBC Nikko Securities.
Stocks lost ground despite a report released by the Bank of Japan early Monday that showed the business confidence of major manufacturers turned positive in September after diving in the wake of Japan's March disasters.
"While firms' sentiment is improving, we need to keep a watch on how European debt problems, European and US economic conditions, and the stronger yen will impact the next survey," said Takashi Ushio, general manager at Marusan Securities.
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