Tokyo: Asian shares tumbled again Friday, 17 August, with the Tokyo benchmark nose-diving 5.4%, as the region showed little sign of staging a recovery amid a global sell-off over US credit fears.
The dollar’s decline that worsened earnings prospects for Japanese companies added to the battering Tokyo’s benchmark has been taking in recent sessions, sending the Nikkei 225 index crashing 874.81 points, or 5.4%, to close at 15,273.68, its lowest close in a year.
Hong Kong’s blue chip Hang Seng Index was down 3.3% midafternoon, and the Korea Composite Stock Price Index was down 3.19% after dropping 6.9% the previous session.
Some Asian markets had tried to buck the trend on early bargain-hunting but quickly began falling across the board, continuing a worldwide sell-off that has hit recently over the US subprime mortgage crisis.
Taiwan main stock benchmark fell 1.4% to a three-month low at 8,090.29. Philippine 30-company stock index closed at a new low for the year, losing 2% to its lowest level since 27 December.
New Zealand’s NZX-50 index shed 1.6% in a rush of selling in the last hour of trading. Shares were also down in Australia, India, Malaysia, Singapore and China.
Credit Suisse Chief Strategist Shinichi Ichikawa said any bad news ahead, such as a bank abroad faltering, could worsen the market jitters.
“The next couple of weeks will be a very tough time for global financial markets,” he said.
Earlier Friday, Japan’s central bank injected 1.2 trillion yen ($10.5 billion; €7.8 billion) into money markets — the third injection this week and triple the amount it injected the day before — in a bid to curb rises in key interest rates.
Central banks in the US, Europe, Australia and Japan have injected tens of billions of dollars into money markets since Aug. 9, when stocks tumbled because of worries over US subprime mortgage problems. So, far the extra money, meant to ease concerns about a credit crunch, has been unable to halt the global sell-off.
In Japan, a further fall of the dollar against the yen led stocks lower. A weak dollar hurts Japan’s giant exporters like Toyota Motor Corp. and Sony Corp. by reducing the value of their overseas earnings when converted into yen. A weak dollar also makes Japanese exports more expensive abroad.
The dollar slid to 112.42 yen by midafternoon, down from 113.11 yen late Thursday in New York. Overnight, the greenback plunged as low as 112.01 yen — the lowest level since June 2006 — as traders shied away from risky yen carry trades.
The Dow Jones industrial average Thursday closed down just 16 points after falling more than 340 points during the day, pulling off a dramatic late-session turnaround on massive bargain-hunting.