Japan stocks slide on yen, recession fears

Japan stocks slide on yen, recession fears
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First Published: Fri, Mar 07 2008. 11 52 AM IST
Updated: Fri, Mar 07 2008. 11 52 AM IST
Aiko Hayashi / Reuters
Tokyo: Japan’s Nikkei average fell 2.9% to a six-week low on Friday as investors sold exporters such as Sony Corp on a stronger yen and fears of a US recession, while silicon wafer maker Sumco Corp tumbled after predicting weaker profits.
Banks such as Mitsubishi UFJ Financial Group also took a beating after US mortgage lender Thornburg Mortgage Inc said it failed to meet a $28 million margin call, the latest victim of the global credit crisis.
Investors shifted funds into the perceived safety of Japanese government bonds, with the benchmark 10-year yield falling as low as 1.33% to come in sight of a one-month low of 1.32% hit on Monday.
“Credit fears are spreading. Things like that probably won’t be over after one or two cases and investors are worried there will be more,” said Takahiko Murai, general manager of equities at Nozomi Securities.
“We now have more pessimists in the market in terms of whether the U.S. will tip into a recession or it will be just a temporary slowdown,” predicting the Nikkei could fall to the 11,000-12,000 level.
The benchmark Nikkei average ended the morning session down 378.60 points at 12,836.82, hitting its lowest point since 23 January. It fell as much as 3.6% at one point. The broader TOPIX index shed 2.6% to 1,254.56.
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First Published: Fri, Mar 07 2008. 11 52 AM IST