Euro recovers all overnight losses as stock markets shrug off Italian referendum anxiety

Tokyo stocks opened lower on Monday morning after Mr Renzi’s resignation, AFP reports.

The euro also briefly dived to 20-month lows against the dollar on the news which sparked demand for the safe-haven yen – a negative for Japanese shares as the stronger currency hurts exporters’ profitability.

Concerns over political uncertainty are spreading “as news trickles out that those opposing reform are gaining the edge”, said Yutaka Miura, a senior technical analyst at Mizuho Securities.

“An overheated rally in US equities and the dollar – and the dip in the yen – is taking a pause, causing Japanese stocks to trade slightly weaker,” he told Bloomberg News.

Tokyo’s benchmark Nikkei 225 index opened down 0.41 percent, or 76.16 points, at 18,349.92, while the Topix index of all first-section issues was off 0.51 percent, or 7.56 points, to 1,470.42.

In forex markets, the euro slumped to $1.0506 in early Tokyo trade, its lowest since March 2015, but it later rebounded to $1.0585.

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