TOKYO: Tokyo stocks dived three percent on Friday, as news of a heavily mutated Covid variant spooked investors and strengthened the safe haven yen.
The rout was intensified by the relatively thin trade, with many investors taking a break with the US market shut for the Thanksgiving holiday.
In early afternoon trade, the benchmark Nikkei 225 index was down 3.02 percent, or 891.30 points, at 28,607.98, while the broader Topix index slipped 2.41 percent or 48.77 points to 1,976.92.
"It appears to be worries over the variant of the coronavirus strain first discovered in South Africa that is weighing on the market," said Ryuta Otsuka, senior strategist at Toyo Securities.
Tokyo stocks open lower after mixed US close
"As trading volume is thin, the declines are significant, with hedge funds and others selling," he told AFP.
"There doesn't seem to be enough energy to buck the downward trend."
The sell-off came after scientists in South Africa announced they had detected a new Covid-19 variant with a large number of mutations.
Britain swiftly announced restrictions on travel from the country and five other southern African nations, with scientists warning the new variant could be more infectious than Delta and more resistant to current vaccines.
The news sent investors flocking to the safe haven yen, strengthening the currency after weeks of declines against the dollar, and weighing on the market.
The dollar fetched 114.69 yen in Asian trade, against 115.34 yen in London late Thursday.
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