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Tokyo stocks slump 3 percent as yen gains in strength

Tokyo stocks have dropped more than three percent in morning trade as a sharp jump in the yen affected exporters. Worries over the global economy and the upcoming British vote on EU membership were foremost.

Policy meetings at the US Federal Reserve and the Bank of Japan (BoJ) in the coming week, new decisions due on possible Japanese economic stimulus measures and the Brexit vote in the UK later in June set the tone for trade in Tokyo on Monday.

"The referendum is getting nearer and opinion polls are showing a very tight race," Shin Kadota, chief FX strategist at Barclays, told the Reuters news agency.

Tokyo's benchmark Nikkei 225 index shed 3.03 percent, or 502.86 points, to 16,098.50, extending its slump after ending two straight sessions in negative territory. The Topix index of all first-section shares lost 2.95 percent, or 39.26 points, to 1,291.46.

Orlando shooting prompts currency gains

In currency markets the yen gained as investors shifted into safer investments, seeking safety in the Japanese currency, with sentiment taking a further beating following the mass shooting in Orlando, Florida. A stronger yen is considered to be bad for Japanese stocks as it shrinks the value of exporters' repatriated profits.

Japan's benchmark 10-year bond yield fell to a record low of minus 0.165 percent.

ss/jm (AFP, Reuters)