Japan Stocks Start The Year With a Drop and Tokyo Awaiting The Declaration of a State of Emergency

Japan shares closed lower on Monday after Prime Minister Yoshihide Suga said he was considering declaring a state of emergency in Tokyo and surrounding areas to contain the spike in coronavirus infections domestically.

The Nikkei index fell 0.68% to 27,258.38 points on its first trading day in 2021, its biggest daily drop in two weeks. The broader Topix index fell 0.56% to 1,794.59 points.

Shares in airlines, transportation, real estate and retail stores fell, fearing that travel restrictions and reduced working hours would cut spending and damage the services sector.

Japanese stocks rose in the last days of last year, reaching a peak of 30 years, thanks to hopes of strengthening approvals for vaccines to prevent the Coronavirus, and the global economy recovered from the pandemic, but the record number of infections in Tokyo and surrounding cities undermined investor optimism.

Central Japan Railways recorded the weakest performance among the top 30 major stocks on the Topix index, dropping 2.74%, followed by Tokyo Marine Holdings, which lost 1.787%. 37 stocks advanced on the Nikkei, against a decline of 185.