Japan's Nikkei Falls 1.7% in Early Trade

Tokyo stocks opened 1.70 per cent lower Monday as government figures showed Japan's July-September gross domestic production contracted for a second straight quarter and as the safe-haven yen strengthened following terrorist attacks in France. 

The benchmark Nikkei 225 index at the Tokyo Stock Exchange fell 332.95 points to 19,263.96 in opening deals, while the broader Topix index of all first-section shares opened down 1.67 percent, or 26.49 points, to 1,559.34. 

The dollar dropped to 122.45 yen from 122.62 yen Friday in New York after currency trading started for the first time since the November 13 attacks that left more than 100 people dead in Paris. 

The yen also strengthened against the euro. 

"Global markets may turn to risk-off in the short term as geopolitical risk rises," Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management, told Bloomberg News. 

"But I think the impact to the global economy is limited, even if there is some impact on the French and EU economies." 

The Japanese economy shrank 0.2 percent in the July-September period, the government said Monday, slipping into recession for the second time since Prime Minister Shinzo Abe came to power nearly three years ago. 

The result marks a fresh blow to the prime minister's eponymous "Abenomics" policy blitz of fiscal spending and aggressive monetary policy easing aimed at reviving the world's number three economy. 

"The real economy is at a standstill, even though other aspects of Abenomics -- corporate earnings and stock prices -- are improving," said Taro Saito, director of economic research at NLI Research Institute. 

"Sentiment in corporate investment was not very strong in the first place, but uncertainties over overseas economies led by China had further negative impact" on companies' decision-making in investment, he told AFP. 

Wall Street closed down for the third day Friday on worries about weak US consumer spending going into the crucial holiday season. 

The Dow ended down 1.16 percent, while the S&P 500 shed 1.12 percent and the Nasdaq tumbled 1.54 percent.

In currency trading, the euro slipped to $1.0715 and 131.21 yen from $1.0764 and 131.99 yen in US trade.