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Nikkei falls below 14,000 on futures-led selling

JIJI

Stocks tumbled Wednesday on futures-led speculative selling amid the yen’s appreciation, with the Nikkei 225 average ending below 14,000.

The Nikkei shed 576.12 points, or 4.00 percent, to close at the day’s low of 13,824.94, its first finish below 14,000 since July 31. On Tuesday, the key market gauge climbed 143.02 points.

The Topix slumped 38.40 points, or 3.22 percent, to end at the day’s low of 1,155.26 after rising 8.92 points the previous day.

Stocks were hit by selling from the outset Wednesday after an overnight drop on Wall Street and amid the yen’s rise against the dollar, brokers said.

The Nikkei tumbled below the psychologically important 14,000 mark in early afternoon trading, pressured by arbitrage unwinding, brokers said.

The downswing accelerated due chiefly to futures-led speculative selling prior to Friday’s special quotation fixing to settle August options contracts, brokers said.

The Nikkei’s tumble was led by plunges in heavily weighted components such as mobile carrier Softbank and clothing retailer Fast Retailing, brokers said.

Now that key companies have released quarterly earnings reports, “investors moved to sell off amid a dearth of fresh incentives,” said Nobuyuki Fujimoto, a market analyst at SBI Securities Co.

Volume in the first section increased to 2.422 billion shares from Tuesday’s 2.265 billion, but trading remained thin with many investors away for a summer break, brokers said.

Losers in the first section overwhelmed winners 1,612 to 98, while 43 issues were unchanged.

All 33 sector subindexes in the first section lost ground.

Isuzu tumbled 7.24 percent on growing concerns over the outlook for the automaker’s sales in slowing emerging economies, brokers said. Peers Toyota, Mazda and Nissan were also battered.

Yield at three-month low

Japanese government bonds rose Wednesday as buying took the upper hand amid the yen’s rise and the stock market’s tumble, sending the key 10-year yield to a three-month low.

The yield on the 329th 10-year JGB with a 0.8 percent coupon dropped to 0.750 percent in late interdealer cash trading, a level unseen since May 13, from 0.780 percent late Tuesday.

The lead September contract on 10-year JGBs rose 0.36 point to end at 144.02.