Stocks plunged Wednesday, pressured by selling to cash in gains due to concerns over precariously high prices on the back of overnight falls in U.S. equities and a rise in the yen.
The Nikkei 225 average tumbled 341.72 points, or 2.17 percent, to 15,407.94. On Tuesday, the key market gauge advanced 94.59 points to close at its highest level since Dec. 12, 2007.
The Topix closed down 21.55 points, or 1.71 percent, at 1,240.99 after climbing 3.60 points Tuesday to mark its best finish since last May.
Stocks came under strong selling pressure from the outset of trading after the Dow Jones industrial average extended its losing streak to a third session Tuesday due to worries that the U.S. Federal Reserve may soon scale down its quantitative easing policy.
Investors were also disappointed at the dollar’s fall below ¥103.
The Nikkei briefly tumbled more than 400 points in early trading, hit by a flurry of large-lot futures-led selling, brokers said.
Still, the key market yardstick showed some resilience in the afternoon thanks to futures-led buybacks as well as buying on dips for heavily weighted Nikkei component issues, such as mobile phone carrier SoftBank, brokers said.
On a closing basis, the Nikkei shot up some 1,662 points, or 11.8 percent, since Nov. 8.
Considering the rapid surge in stock prices, Wednesday’s tumble was a natural pause, an official at a major securities firm said.
Position-adjustment selling prior to the release Friday of the U.S. government’s employment data for November also drove down stock prices, brokers said.
Favorable readings in the jobs data are likely to fuel speculation that the Fed will start full discussions on tapering off the easing policy at its two-day Federal Open Market Committee meeting from Dec. 17, brokers said.
Losers far outnumbered winners 1,483 to 199 in the first section, while 81 issues were unchanged. Volume decreased to 2.540 billion shares from Tuesday’s 2.689 billion.
The yen’s appreciation bruised export-oriented names.
JGB futures bounce back
Japanese government bond futures bounced back slightly Wednesday due to an overnight rise in U.S. Treasury securities and lower stock prices.
The lead December futures contract on 10-year JGBs finished up 0.02 point from Tuesday at 144.86. Volume fell to 31,372 contracts from 32,007.