State of Emergency in Japan Pushes Nikkei Lower

Japanese stocks fell on Tuesday, as the government appeared to be preparing to declare a state of emergency to deal with the rise in Covid-19 infections, while investor appetite for risk was also negatively affected by the uncertainty over the re-election for the Senate in the US state of Georgia.

The Nikkei index fell to more than 27 thousand points, while the broader Topix index fell to 17 thousand points, recording losses for the third session in a row.

Elections in Georgia will determine who is in control of the Senate, and thus how much US President-elect Joe Biden will push across the Democratic Party’s agenda, notably tax reorganization, boosting stimulus and infrastructure spending.

Shares of airlines and railway operations were among the worst performers among the 33 sector sub-indices on the Tokyo Stock Exchange, and the sectors fell 1.2% and 1.5%, respectively, due to the possibility of imposing new restrictions to contain the health crisis.

Japan declared a state of emergency in Tokyo and the surrounding region, which will be taken on Thursday.

The yen rose to 103 per dollar today, its highest in nearly ten months.

On the other hand, many technology companies maintained their gains as the Coronavirus pandemic worsened in many countries.