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Tokyo stocks close down 1.86pc

TOKYO, Sept 5 – Tokyo share prices closed 1.86 percent lower on Monday with investors discouraged by a dismal US jobs report and the yen’s rise against the euro due to European debt worries, brokers said.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 166.28 points to 8,784.46. The Topix index of all first-section issues sank 13.96 points or 1.81 percent to 755.82.

Renewed fears of a global slowdown gripped sentiment, dealers said.

US stocks plunged Friday on the weak payrolls data while the euro tumbled against the safe-haven yen after talks between Greece and international inspectors were suspended Friday.

The euro was trading at 108.60 yen in Tokyo afternoon trade, down from 109.72 yen in New York late Friday, dealing a blow to Japanese exporters dependent on the European market.

Sony fell 4.00 percent to 1,560 yen and Honda Motor plunged 4.70 percent to 2,389 yen on a weaker euro. Shortly before the closing bell, Honda said it would recall 936,000 cars worldwide due to defective power window switches.

“The US data was negative, but investors are more focused on developments in Europe with Greece becoming a destabilising factor,” Hideyuki Ishiguro, strategist at Okasan Securities, told Dow Jones Newswires.

The European Union and International Monetary Fund left a critical audit of Greek finances unfinished on Friday saying more budget work was needed, and Athens admitted its deficit target is in trouble.

Ishiguro added Japanese shares were helped by relatively high support ratings for the new prime minister, Yoshihiko Noda, who was sworn in on Friday as the nation’s sixth new leader in five years.

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Opinion polls showed over the weekend that his cabinet won solid public backing, with approval ratings topping 60 percent.

Shares of insurer Tokio Marine Holdings fell 3.86 percent to 1,964 yen after a typhoon wreaked havoc in western Japan.

Houses, cars and other insurable assets were hard-hit as floodwaters triggered landslides that swept buildings away, killing at least 27 people.

In New York the Dow Jones Industrial Average ended down 2.20 percent at 11,240.26 after the highly awaited US non-farm payrolls report revealed that the US economy created no jobs in August.

Financial stocks also took a severe pounding after reports that US authorities would sue more than a dozen big banks over their peddling of mortgage-backed securities prior to the 2008 financial crisis.

The pending suit was announced after the market’s close.

Nomura Holdings tumbled 4.64 percent to 308 yen. The Japanese brokerage house’s US unit is one of 17 financial institutions being sued over soured mortgage bonds in order to recoup heavy losses from failed investments.

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