Britain's vote last week to leave the European Union will not only affect Japanese firms that have invested in the country as a hub of their operations in the European market but adds to the uncertainty over global growth already rattled by slowdowns in emerging economies. World financial market jitters following the Thursday vote continue. Both the government and businesses need to remain on guard to stop repercussions of the Brexit vote from further damaging the prospects of Japan's economy.
The Tokyo market was in a panic mode last Friday as it became clear that the British, despite indications of an opposite result just the previous day, voted after all to exit from the EU. The yen temporarily shot up through 100 to the dollar for the first time in 31 months and concern that the currency's sharp rise would damage the earnings of major manufacturers led to an across-the-board plunge in share prices at the Tokyo Stock Exchange, where the nearly 1,300 point fall of the Nikkei average was the steepest one-day decline in roughly 16 years.
The TSE, which recovered some of the losses on Monday, ended nearly flat Tuesday as U.S. and European markets overnight continued to feel the weight of the Brexit vote, even as financial authorities have scrambled to ease market fears over its impact.
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