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

* 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)