Japanese stocks tumble on lockdown fears as new fiscal year begins

April 1 (Reuters) - Japanese shares plummeted on Wednesday
on the first day of the new fiscal year, as investors braced for
a potential lockdown of Tokyo, a global recession, and sharp
cuts in corporate earnings and dividend payouts due to the
coronavirus pandemic.
The benchmark Nikkei average .N225 fell 4.5% to a one-week
closing low of 18,065.41. However, overall trading was subdued,
with the volume of shares traded on the main board valued at
2.72 trillion yen, its lowest level in a month.
Traders said some short-term players sold stock futures in
the afternoon, while many other investors were reluctant to buy
as they opted to see if and when Japan would declare a national
emergency and implement lockdown measures in Tokyo.
New virus infections in the capital rose to a daily record
of 78 on Tuesday, and of a total of more than 500, amid calls
for Prime Minister Shinzo Abe to declare a state of emergency
that would allow authorities to trigger a lockdown involving
restrictions on movement. "If the Greater Tokyo area goes into a lockdown for a month
in April, it would cause considerable deterioration in corporate
earnings," said Ryota Sakagami, chief equity strategist at
J.P.Morgan Securities Japan.
"It would also send a message to overseas investors that
Japan is facing a worsening situation with coronavirus, which
could drag Japanese stocks down further."
The Bank of Japan's "tankan" corporate survey showed on
Wednesday that Japanese manufacturers turned pessimistic for the
first time in seven years. "Although the data was better than expected, it reflected
the impact of coronavirus on the economy," said Yoshihiro Ito,
senior strategist at Okasan Online Securities.
"We are likely to see a torrent of earnings downgrades and
dividend cuts ahead of earnings announcements."
The broader Topix .TOPX lost 3.7% to 1,351.08, its lowest
closing in a week, with all of the 33 sector sub-indexes on the
Tokyo Stock Exchange finishing in negative territory.
Airlines .IAIRL.T was the worst performing sector, down
6.7%, with ANA Holdings 9202.T diving 8.3%.
Defensive shares that performed relatively well in recent
weeks were among the worst performers, as investors took profits
at the start of the new financial year.
Chemical and cosmetics firm Kao Corp 4452.T dropped 6.3%,
while mobile carrier NTT DoCoMo 9437.T shed 6.6%.
East Japan Railway 9020.T lost 5.3% on mounting
speculation that the Japanese government may impose tougher
restrictions such as a lockdown in Tokyo to deal with rising
coronavirus infections in the capital.
Bucking the overall trend, web/TV conferencing services
provider V-cube Inc 3681.T surged 20.9% and e-learning company
iStudy Co Ltd 2345.T soared 28.9% to its daily-limit high.
Elsewhere, the TSE REIT index .TREIT fell 6.1%.