Tokyo stocks ended one percent lower Monday after data showed Japan's economy slipped back into recession in July-September, while the deadly Paris terror attacks weighed on airline and travel stocks. The economy shrank 0.2 percent in the third quarter, official data showed, the second straight quarterly decline - a technical recession.
It marks the second recession since Prime Minister Shinzo Abe came to power nearly three years ago and deals a fresh blow to his programme of aggressive monetary and fiscal stimulus - dubbed Abenomics - aimed at reviving growth. The benchmark Nikkei 225 index at the Tokyo Stock Exchange slipped 1.04 percent, or 203.22 points, to 19,393.69, while the broader Topix index of all first-section shares closed down 0.90 percent, or 14.30 points, at 1,571.53.
"The real economy is at a standstill, even though other aspects of Abenomics - corporate earnings and stock prices - are improving," said Taro Saito, director of economic research at NLI Research Institute. "Sentiment in corporate investment was not very strong in the first place, but uncertainties over overseas economies led by China had further negative impact" on companies' decision-making in investment, he told AFP. In share trading, Japan Airlines (JAL) closed down 2.95 percent to 4,558 yen, while rival All Nippon Airways tumbled 3.46 percent to 361.9 yen.
HIS, a major travel agency in Japan, finished 5.02 percent lower at 4,060 yen. Waseda University Professor Hajime Tozaki, a former JAL employee, said the airlines must find a way to offset a decline in the number of business and leisure passengers to France, a key route to Europe for them. "Airlines are really limited in what they can do to mitigate the negative impact," he told AFP.
"They must make sure their overall profitability will not fall based on their operations domestically and in other regions." Toyota finished 1.51 percent lower at 7,411 yen, while Sony dropped 2.00 percent to 3,319 yen. Market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, lost 2.21 percent to 46,440 yen. In currency trading, the dollar ticked down to 122.60 yen from 122.62 yen Friday in New York. The euro was down at $1.0755 and 131.83 yen from $1.0764 and 131.99 yen.