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Asian shares fall on Greece political uncertainty

in International Business

Asian shares fall on Greece political uncertainty

Shares in Asia have fallen, taking their lead from Europe and the US, as political turmoil in Greece made investors seek less risky assets.

Japan’s Nikkei 225 index was down 1.2%, while South Korea’s Kospi was down 1.4%.

The euro, which was down 0.7% late in New York to $1.2824, recovered slightly in early Asian trading to $1.2833.

Greek leaders meet again Tuesday as the country struggles to form a coalition government.

The uncertainty in Europe has sparked a tumble in global markets.

The US benchmark Dow Jones index closed down 1%. London’s FTSE 100 share index and Germany’s Dax fell 2%.

Bank shares were the most affected, particularly in Spain and France.

Greek exit?

Eurozone finance ministers met on Monday in Brussels to discuss the problems in Greece and Spain.

Luxembourg Prime Minister Jean-Claude Juncker, also head of the 17-nation Eurogroup, said there was an “unshakeable desire to keep Greece within the eurozone”.

“We will do everything possible to achieve that.”

Analysts say the possibility of a Greek exit from the eurozone is likely if it cannot pay its debts. That, in turn, would cause a ripple effect throughout Europe and its struggling economies.

“The exit of Greece from the single currency has become probable; not so long ago it was impossible,” analysts at DBS Bank in Singapore said in an email to Reuters news agency.

Exporters worried

The fall in Japanese shares was mainly due to exporters with exposure to Europe.

Mazda Motor, the Japanese carmaker with a high proportion of European sales, fell 5.5%.

Toyota Motor, Nissan Motor and Honda Motor also fell between 2% and 3.3%.

“The markets are in risk-off mode because everyone is thinking, if Greece leaves the euro, who’s next?” said Norihiro Fujito, from Mitsubishi UFJ Morgan Stanley.

The yen, considered a safe-haven asset, strengthened to a three-month high against the euro, which fell to 102.4 yen after being heavily sold o

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