Tokyo stocks tumble more than 3% in afternoon

 04 Jan 2016 - 9:20

Tokyo stocks tumble more than 3% in afternoon

Tokyo: Tokyo stocks tumbled more than three percent Monday, hit by weak China data and a pick-up in the yen as investors seek out the safe-haven unit fearing growing tensions in the Middle East.

China's factory activity shrank further in December, a private survey showed Monday, the 10th consecutive month of contraction with the world's number two economy set to post its weakest growth in a quarter of a century.

The news hammered the Shanghai and Shenzhen stock markets, which were suspended Monday after tumbling five percent.

That came after official figures Friday also showed manufacturing in the country continued to struggle.

Saudi Arabia severed diplomatic ties with its old foe Iran Sunday after protesters ransacked its embassy in Tehran in response to the execution of a Shiite cleric.

"We were starting to see signs that the economic slowdown in China had run its course, so today's report was a disappointment," Masayuki Otani, chief market strategist at Securities Japan Inc, told Bloomberg News. 

"The Saudi Arabia and Iran issue might be good for oil, but the increase in geopolitical risk means it's an overall negative for the financial markets."

The benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 3.02 percent, or 575.33 points, to 18,458.38, in mid-afternoon trade. 

The broader Topix index of all first-section shares lost 2.36 percent, or 36.48 points, to 1,510.82.

The dollar slipped below the psychologically key mark of 120 yen to its lowest level since October as investors fled to the Japanese unit, which is seen as a safe haven in times of turmoil and uncertainty.