Tokyo stocks open flat after quake, tsunami

A businessman watching a display showing the foreign exchange rate between the Japanese yen and US dollar in Tokyo.
A businessman watching a display showing the foreign exchange rate between the Japanese yen and US dollar in Tokyo. PHOTO: EPA

TOKYO (AFP) - Tokyo stocks opened flat on Tuesday (Nov 22) as investors assessed the impact of a strong earthquake that triggered tsunamis along Japan's northeast coast, although no major damage was immediately reported.

Tokyo's bellwether Nikkei index had risen to a 10-month high by Monday as the US dollar soared against the yen on expectations the Federal Reserve will raise interest rates next month.

But the yen, which is often bought as a safe haven in time of uncertainty, strengthened Tuesday soon after the quake.

"Stocks would have been off to a strong start but there's a bit of a wait-and-see mode due to the earthquake," said Nobuyuki Fujimoto, a senior market analyst at SBI Securities Co.

"Investors will eye news on the earthquake but as long as the damage isn't extreme, there won't be lasting impact on markets," he told Bloomberg News.

The benchmark Nikkei 225 index slipped 0.09 per cent, or 15.62 points, to 18,090.40 in the first few minutes of trading, while the Topix index of all first-section issues was up 0.04 per cent, or 0.52 points, at 1,443.45.

The dollar was trading at 110.60 yen on Tuesday, compared with levels above 111 yen seen before the earthquake.

A stronger yen is negative to the stock market as it eats into exporters' profitability.

A powerful 6.9-magnitude earthquake hit Japan's northeast early Tuesday, triggering warnings of tsunami waves as high as three metres on the coast near the stricken Fukushima nuclear power plant.

Several tsunamis, the biggest measuring 1.4 metres, were observed on the northeastern coast, according to NHK.

One measuring one metre was recorded at the Fukushima plant but operator Tokyo Electric Power (TEPCO) said there were no reports of any problems as a result of the wave.

Shares in TEPCO fell 1.17 per cent to 422 yen in early trading.