Japanese stocks stumbled to a five-week low on Monday as Brexit woes sapped risk appetite and hit equities globally.
Continuing strength in the safe-haven yen, which advanced to a one-month high versus the dollar and reached a three-year peak against the euro, added further pressure on Tokyo equities.
The benchmark Nikkei share average was down 2.7 percent at midday after dropping to its lowest since May 6, dragged down by Friday’s losses in European and U.S. stocks.
Global risk assets have taken a beating on growing concerns a referendum next week could push Britain out of the European Union and hurt the global economy.
“The British referendum (on June 23) is likely to dictate the market’s pace for the time being. Japanese stocks were already on a weak footing last week, so today’s decline is in alignment with that,” said Soichiro Monji, chief strategist at Daiwa SB Investments.
Volatility is expected to remain high with the Federal Reserve and Bank of Japan holding policy meetings later this week.
“Even if the BOJ were to ease again, it is difficult to tell whether that would lift stocks and weaken the yen,” Monji said.
Exporters suffered losses on the appreciating yen.
Auto parts supplier Calsonic Kansei rose as much as 14.75 percent to a more than four-month high after a report that private equity funds Bain Capital and KKR are among the potential bidders for Nissan Motor Co’s sale of its stake in Calsonic.
Electric appliances retailer Nojima Corp climbed as much as 12.7 percent to a six-month peak after an announcement that it will upgrade its listing to the Tokyo Stock Exchange’s first section from JASDAQ.
The broader Topix and the JPX-Nikkei Index 400 both fell 2.8 percent.