Tokyo stocks hammered lower
TOKYO: Japanese stocks plunged Wednesday to their lowest level in more than two years as investors fretted about an overnight dive on Wall Street amid a growing conviction that the U.S. is headed toward a recession.
The benchmark Nikkei 225 stock index lost 468.12 points, or 3.35 percent, to 13,504.51 points on the Tokyo Stock Exchange. That was the lowest finish since Oct. 28, 2005. It also brought the indexs year-to-date loss to 11.8 percent in 2008.
The yens surge and speculation that weaker demand from American consumers send shares of major exporters Toyota, Sony and Honda tumbling.
Investors reacted anxiously to news of weak U.S. retail sales figures and that Citigroups announcement that it lost nearly $10 billion in the fourth quarter and write down $18.1 billion write-down for bad mortgage assets. In New York Tuesday, the Dow Jones industrial average down 277.04, or 2.17 percent, to 12,501.11, the latest in a string of triple-digit slides.
“Fears about an American recession and the decline in American shares set off selling in Tokyo,” said Noritsugu Hirakawa, who monitors stock trading at Okasan Securities in Tokyo.
The dollar fell below 106 for the first time since May 2005, further damping sentiment. A strong yen generally pushes down the earnings of Japanese exporters.
“The Tokyo market is very sensitive to the strong yen,” said a Daiwa Securities analyst, Tsuyoshi Nomaguchi.
Toyota Motor fell 3.97 percent, Honda Motor fell 4.90 percent, and Sony plunged 6.76 percent.
Semiconductor stocks also fell after Intel shares plunged overnight on concerns that the worlds largest semiconductor maker is feeling the pinch of an ailing U.S. economy. Kyocera fell 1.34 percent, while Elpida Memory plummeted 6.78 percent.
The broader Topix index, which includes all shares on the exchanges first section, shed 47.83 points, or 3.54 percent, to 1,302.37.
