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Tokyo, March 22, 2017 (AFP) -Tokyo stocks fell Wednesday morning, tracking Wall Street's biggest loss of the year on concerns about US President Donald Trump's ability to advance his economy-boosting agenda in Washington.
The rally in global markets has come to a juddering halt as traders fret over the tycoon's struggle to push through his replacement for Obamacare, which is opposed by many in his Republican party.
Analysts say the inexperienced Trump is spending too much capital on the issue and if he is unable to push it through a Republican-controlled Capitol Hill, then his other plans -- particularly infrastructure spending, tax cuts and deregulation -- could be in trouble.
Those promises were a key factor behind a global equity market runup following the US November election -- the so-called Trump rally.
After Tuesday's wipeout in New York, the benchmark Nikkei 225 index in Tokyo dropped 2.01 percent, or 390.51 points, to 19,065.37 by the break, while the Topix index of all first-section issues fell 1.89 percent, or 29.52 points, to 1,533.90.
"We're seeing some doubts emerge over how much Trump will be able to enact his policies," Chihiro Ohta, a Tokyo-based senior strategist at SMBC Nikko Securities, told Bloomberg News.
"US long-term yields are falling while the yen is strengthening amid risk-off moves, and the situation is working negatively for Japanese stocks from several directions."
The dollar edged down to 111.63 yen from 111.67 yen in New York and is well off the mid-113 yen levels enjoyed at the end of last week.
Traders tend to push into the yen as a safe bet in times of uncertainty or turmoil, but a stronger currency hurts the profitability of Japanese exporters -- hitting demand for their shares.
Sentiment in Tokyo was also dragged down by a report that North Korea may have launched several missiles Wednesday morning.
South Korea's defence ministry later said the missile test failed, two weeks after Pyongyang fired four rockets in what it called a drill for an attack on US bases in Japan.
Japanese banks and some exporters fell with lender Mitsubishi UFJ tumbling 4.22 percent to 714.2 yen, while rival Sumitomo Mitsui lost 2.37 percent to end the morning at 4,165 yen. Toyota declined 2.65 percent to 6,204 yen.
bur-kh/pb/dan
