Nikkei closes down more than 1.4% after reports Japan PM to resign

Tokyo’s benchmark Nikkei index reversed earlier gains and closed down more than 1.4 percent Friday after reports said Japanese Prime Minister Shizo Abe was to resign for health reasons.

The Nikkei 225 index fell 1.41 percent, or 326.21 points, to 22,882.65 after local media reported Abe was set to quit, hours before he was due to speak at a news conference.

The broader Topix index lost 0.68 percent, or 11.02 points, to 1,604.87.

The Nikkei index temporarily plunged more than 2.6 percent after national broadcaster NHK said “Abe intends to resign as his illness has worsened.”

“It was a panic selling,” said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

“Shares slightly recovered as investors bought back shares later, expecting monetary and economic measures won’t be changed dramatically,” Horiuchi told AFP.

“Trading is likely to remain volatile for now as the market will pay close attention to his successor,” he said.

The yen, considered a safe haven in times of uncertainty, rallied against the dollar, hitting 106.28 to the greenback, from 106.63 on Friday morning.