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Nikkei sheds 54 points on Wall Street tumble

JIJI

Stocks retreated Tuesday, hit by selling after an overnight plunge in New York equities, but the TSE cut early losses thanks to a halt in the yen’s rise.

The Nikkei 225 average closed down 54.22 points at 13,221.44, extending its losing streak to a third session. On Monday the key market gauge plunged 209.48 points.

The Topix dropped 14.79 points to end at 1,119.20 after losing 14.58 points the previous day.

Stocks came under selling pressure from the outset of trading, briefly driving the Nikkei down some 270 points to a level slightly above 13,000.

The losses came after an overnight tumble in U.S. equities due to wariness over a Chinese economic slowdown and news that bombs exploded near the finish line of the Boston Marathon on Monday.

In Tokyo, investor sentiment was also dampened by the yen’s strengthening against the dollar and the euro.

After the initial selling ran its course, however, the Nikkei recouped much of the losses thanks to a halt in the yen’s appreciation, brokers said. The key index moved and down around the previous day’s closing level for most of the afternoon.

The market’s downside was also supported by what are believed to be purchases of exchange-traded funds by the Bank of Japan, brokers said.

Following recent signs of market overheating, the TSE has entered a short-term correction, brokers said.

“Active purchases have been held in check as investors are worried about a possible warning against a weaker yen” by finance ministers and central bank chiefs from the Group of 20 major advanced and developing countries at their two-day meeting starting Thursday in Washington, said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.

Falling issues overwhelmed rising ones 1,261 to 375 in the first section, while 74 issues were unchanged.

Volume increased to 4.359 billion shares from Monday’s 4.230 billion.

JGBs come roaring back

Japanese government bonds surged Tuesday, after a U.S. Treasury rally on the Boston Marathon bombing and higher buying sentiment after the day’s auction of new five-year government notes.

The lead June futures contract on 10-year JGBs rose 5.55 points from Monday at 144.09 as volume hit 33,473 contracts from 24,709.