Тokyo's Stock Investors Add France's Le Pen to the List of Risks

Just as stock investors in Tokyo were starting to factor in the outlook for global trade under U. S President Donald Trump, comments from France's far-right leader have pushed down Japanese shares.

The Topix index declined, with exporters dragging on the benchmark, after European shares drifted lower Monday as prospective French Presidential candidate Marine Le Pen unveiled a manifesto pledge to take the country out of the European Union should she win. The yen held gains after strengthening 0.8% Monday amid increased risk-off sentiment. Trump and Japanese Prime Minister Sninzo Abe are scheduled to meet in Washington on Friday.

"The French election is one of the biggest risks of this year, and if Le Pen wins within this climate of increasing anti-globalism, there's the risk that the European Union will collapse," said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities Co. in Tokyo. " The yen is also strengthening due to the concerns over the US - Japan meeting this week, and it's a tougher situation for the Japanese stocks."

Japan's earnings season continues, with more than 100 companies on the Topix reporting results Tuesday including JH Holdings, Inc. and NTT data Corp. Toyota Motors and many more.

If the Topix continue to fall, there is a risk that the yen will continue to raise and all currency pairs with yen will continue to fall as well.

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