Japanese stocks fell on Tuesday morning, hurt by a combination of rising geopolitical tensions, a stronger yen and volatile trading in Toshiba Corp shares ahead of the third deadline for its earnings filing. Toshiba opened higher but stumbled 5 percent. Two people familiar with the matter told Reuters that the struggling company aims to file its twice-delayed business results on Tuesday, even if its auditors don’t fully sign off on the numbers to avoid a potential delisting from the Tokyo Stock Exchange. The Nikkei share average dropped 0.5 percent to 18,699.41 in midmorning trade.
Traders say investors remained on the sidelines due to uncertainty around the upcoming French presidential election and heightened tensions in the Middle East following last week’s U.S. missile strikes on Syria. “The market is not too worried that more action on Syria by the U.S. is imminent and investors are not expecting Le Pen to win the French election, but the market is already tense,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
“Investors are preparing for any possibility now.” In France, polls for many weeks have been showing centrist Emmanuel Macron and far-right leader Marine Le Pen on track to top the first round of voting on April 23 and go through to a May 7 runoff. While Le Pen’s plans to ditch the euro and hold a referendum on EU membership have spooked many investors, recent polls have pointed to a tighter race, with support for far-left candidate Jean-Luc Melenchon surging recently.
The risk-averse mood hit financial stocks. Mitsubishi UFJ Financial Group and Mizuho Financial Group shed 1.4 percent each, Nomura Holdings declined 1.0 percent and Daiwa Securities Group tumbled 2.2 percent as the dollar dropped 0.2 percent to 110.68 yen, moving away from its overnight high of 111.57. Exporters languished, with Honda Motor Co falling 0.9 percent and Panasonic Corp dropping 1.1 percent. The broader Topix fell 0.6 percent to 1,490.52 and the JPX-Nikkei Index 400 was down 0.6 percent to 13,357.94.