Nikkei falls as anti-austerity party wins Greek election; stronger yen weighs on market

Sun Jan 25, 2015 8:55pm EST

* Greek election victory for Syriza party
    * Raises prospect of collision with creditors
    * Risks for Japan seen as limited
    * Stronger yen hurts exporters' shares

    By Thomas Wilson
    TOKYO, Jan 26(Reuters) - Japanese stocks fell on Monday as a resounding
election win for Greece's anti-austerity Syriza party raised the prospect of
conflict with the country's international lenders, dampening investors' appetite
for risk.
    The Nikkei benchmark fell 0.5 percent to 17,418.82 points by 0138
GMT, after opening down 1.3 percent. 
    Last week, the average gained 3.8 percent to reach a near one-month high of
17,511.75 after the European Central Bank unveiled a bond-buying scheme to help
revive the euro zone's flagging economy.
    Syriza leader Alexis Tsipras will likely be sworn in on Monday as prime
minister of the first euro zone government openly opposed to the harsh austerity
policies imposed on Greece by the European Union and International Monetary Fund
as a condition of its bailout. .
    Financial markets responded nervously to the victory, fearing potential
conflict with other euro zone governments that risk adding strain to the
currency bloc. 
    However, Japanese investors were largely sanguine, with the market consensus
suggesting that renewed tensions over Greece's public debt is unlikely to hurt
investor sentiment much beyond an initial shock.
    "The risk of Greece leaving the euro zone isn't huge," said Toru Ibayashi,
executive director of wealth management at UBS in Tokyo. 
    "There's uncertainty, but it's a minor threat," said Ibayashi, citing the
limited exposure of European banks to Greece in comparison with the 2011-12 debt
crisis, and preparations made by policymakers to deal with indebted countries.
    A stronger yen also weighed on the market. The Japanese currency traded at
117.63 against the dollar in mid-morning trade, putting pressure on exporters'
shares.
    Panasonic Corp shed 1.2 percent, and automakers Honda Motor Co Ltd
 and Nissan Motor Co Ltd dropped 2.2 percent and 1.3 percent
respectively. 
    Data showed that Japan's exports posted a larger-than-expected 12.9 percent
year-on-year rise in December, boosted by the weak yen and increasing overseas
demand led by the United States. 
    The figures suggest a steady recovery from recession for the Japanese
economy.
    The broader Topix fell 0.6 percent to 1,394.86, while the JPX-Nikkei
Index 400 also shed 0.6 percent to 12,669.01.

 (Reporting by Thomas Wilson; Editing by Kim Coghill)
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