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Nikkei sinks 4% on stronger yen, US worries

Nikkei sinks 4% on stronger yen, US worries
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First Published: Mon, Mar 03 2008. 11 07 AM IST
Updated: Mon, Mar 03 2008. 11 07 AM IST
Reuters
Tokyo: Japan’s Nikkei average fell 4% on Monday, 3 March, with exporters such as Honda Motor Co Ltd hurt by the dollar’s slide to a three-year low against the yen on growing talk of a US recession.
Shares of Japanese consumer lender Takefuji Corp skidded 5.6% to 2,515 yen after it said it may post a loss of up to 30 billion yen ($290 million) on a structured finance transaction hit by the global credit crisis.
Other financial stocks also took a beating on credit worries.
“With a huge drop in US stocks and the sharply firmer yen, the fall can’t be helped. Domestic trading factors can no longer calm the market,” said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.
“Depending on the outcome of economic indicators from now on, we may have to brace ourselves for the possibility of the Nikkei breaking below the recent low hit in January.”
The benchmark Nikkei ended the morning down 545.93 points at 13,057.09 after hitting its lowest level since 12 February.
On 22 January the Nikkei plunged more than 5% to end at 12,573.05, a 28-month closing low and its biggest one-day loss since the session after the 9/11 attacks on the US.
The broader Topix index was down 3.9% or 50.97 points at 1,273.31.
In the US, investors will watch for the Institute for Supply Management’s (ISM) February reading on manufacturing on Monday. The government’s closely watched employment report for February is scheduled for release on Friday.
US stocks tumbled on Friday as another round of weak economic data added to US recession worries and a record loss at insurer AIG underscored worries about more write-downs in the financial sector.
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First Published: Mon, Mar 03 2008. 11 07 AM IST
More Topics: Japan | Stocks | Nikkei | Topix | Yen |