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Tokyo stocks sharply down on tensions after Malaysian plane crash

Tokyo stocks fell 1.09 per cent on Friday morning as the crash of a Malaysian Airlines plane in rebel-held eastern Ukraine sent jitters through the market, including Japanese carriers JAL and ANA.

TOKYO: Tokyo stocks fell 1.09 per cent on Friday morning as the crash of a Malaysian Airlines plane in rebel-held eastern Ukraine sent jitters through the market, including Japanese carriers JAL and ANA.

The Nikkei 225 index slipped 167.71 points to 15,202.55 by the break while the Topix index of all first-section issues was down 0.85 per cent, or 10.82 points, at 1,262.56.

MH17 was carrying 298 people from Amsterdam to Kuala Lumpur when it crashed, with US officials saying it was shot down. The plane was lost in eastern Ukraine where government forces are engaged in a fierce battle to quell a rebellion by pro-Russian insurgents.

The Nikkei's losses were triggered by "nothing but the crash", said Hirokazu Kabeya, senior strategist at Daiwa Securities. He added that business was also hit by soft buying sentiment ahead of a three-day weekend in Japan.

"We still don't know details of the incident but (market players) need to shun risks," Kabeya said. "Tensions had been simmering but they came to the fore again... (Investors) can't be so bold to push ahead with buying at the moment."

On Wall Street, the Dow fell 0.94 per cent from Wednesday's record close, while the S&P 500 sank 1.18 per cent and the Nasdaq was down 1.41 per cent. Geopolitical concerns were exacerbated by Israel's launch of ground operations in the Gaza Strip.

However, "the Russia-Ukraine situation and the Gaza invasion aren't likely to negatively affect the (global) economy," Hideyuki Ishiguro, senior investment strategist at Okasan Securities, told Dow Jones Newswires.

Japan's two biggest airlines were lower by the break with All Nippon Airways (ANA) down 0.80 per cent at 246 yen while Japan Airlines (JAL) fell 0.50 per cent to 5,950 yen. Both carriers said they do not operate flights over Ukrainian airspace.

Embattled electronics maker Sharp fell 3.35 per cent to 317 yen after the Mainichi newspaper said it would report a net loss in the April-June quarter owing to one-time losses linked to restructuring its European solar power business. Fujitsu rose 1.43 per cent to 779 yen after the leading Nikkei business daily reported it decided to withdraw from semiconductor manufacturing.

The yen, considered a safe haven in times of turmoil, was a touch lower against the dollar but still up from Thursday's levels.

The dollar was buying 101.33 yen in midday Tokyo trade, against 101.17 yen in New York but well down from 101.51 yen earlier Thursday in Tokyo.

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