Tokyo stocks were down about two per cent in early trade today after heavily indebted Greece said that it would miss the deficit target set for it by the IMF and EU.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange opened down 1.52 per cent and widened the loss to 1.99 per cent or 173.37 points to 8,526.92 in the first 10 minutes of trading.
The euro fell to $1.3366 in early Asian trade from $1.3451 in New York late Friday and to 103.04 yen from 103.12 yen.
Stocks opened lower despite a report released by the Bank of Japan early today that showed the business confidence of major manufacturers turned positive in September after diving in the wake of Japan’s March disasters.
Negative factors in Tokyo include sharp declines on Wall Street on Friday and a weaker euro against the yen, brokers said.
“The outlook for Japanese equities remains uncertain due to the cloudy global economic conditions, European debt problems and the sharp appreciation in the yen,” said Mr Hiroichi Nishi, general manager at SMBC Nikko Securities.
Yesterday, Greece said that its budget deficit should drop to 8.5 per cent of GDP in 2011 from 10.5 per cent last year, short of a 7.4 per cent target initially fixed in June.
The announcement deepened the fears of a default as the target had been set by European leaders as part of its bailout deal.