Tokyo: Tokyo stocks went into a hair-raising dive on Brexit fears, plunging more than eight percent Friday afternoon as major firms including Toyota and mobile carrier SoftBank went into freefall. The benchmark Nikkei 225 index at the Tokyo Stock Exchange dropped as much as 8.30 percent, or 1,347.79 points, to 14,890.56, while the broader Topix index of all first-section shares shed 8.16 percent, or 105.91 points, to 1,192.80.
Both indexes later pared some of those losses, with the Nikkei crawling back to be down about seven percent around 1:00 pm (0400 GMT). In forex markets, the yen briefly surged to its highest level against the dollar since November 2013, touching 99.02, as traders flocked to the safe-haven currency. The pound briefly dived to around $1.33 from above $1.50 -- its lowest level in 31 years.
"The market plunged into panic selling... as the 'Leave' vote appears to have the upper hand," Yosuke Hosokawa, head of the forex sales team at Sumitomo Mitsui Trust Bank told AFP. "Selling sparked more selling. Seeing the current dollar-yen level, a market intervention by Japanese authorities is getting more realistic. It's an emergency situation but we need to remain vigilant until after the final results."
The remarks came as Japan's Finance Minister Taro Aso was holding an emergency press briefing early Friday afternoon to address the wild market volatility. In recent weeks, Japanese officials have repeatedly warned that a market intervention to weaken the yen was a strong possibility as the surging unit threatened Japan Inc's profits. An intervention is diplomatically sensitive, however, because it risks putting Tokyo on a collision course with G20 counterparts that agreed not to interfere in forex markets.
Japanese exporters were among the main losers on Friday, as the stronger yen sharply hit demand for their shares. A vote to leave the EU could have significant consequences for more than 1,000 Japanese firms that operate in Britain -- many of which see it as a staging point for dealing in Europe.
Toyota at one point lost more then 10 percent before paring some losses, with the auto giant down 7.86 percent at 5,286 yen in mid-afternoon trade. Mobile giant SoftBank slumped 8.24 percent to 5,575 yen, while factory robotics maker Fanuc shed 5.48 percent to 15,695 yen.
