Nikkei logs sharp decline on futures-led selling


Stocks fell again Thursday, dragged down by futures-led selling on the back of the yen’s appreciation.

The Nikkei 225 average tumbled 230.45 points, or 1.50 percent, to close at 15,177.49. On Wednesday, the key market gauge plunged 341.72 points. The Topix closed down 11.34 points, or 0.91 percent, at 1,229.65, after falling 21.55 points Wednesday.

Stocks opened lower, weighed down by selling after the Dow Jones industrial average extended its losing streak to a fourth session Wednesday and the yen firmed against the dollar.

After the initial selling ran its course, the key market gauges rebounded into plus territory, lifted by buying on dips, but soon sank back into negative territory due chiefly to continued selling to lock in profits on recent gains.

Prices extended losses in midafternoon, affected by speculative index futures-led selling following the dollar’s further easing against the yen, brokers said.

A wave of futures-led selling accelerated the downswing of cash stocks after the dollar slipped to levels around ¥102 in late afternoon trading, brokers said.

The selling dealt a blow to stock prices in a market dominated by a wait-and-see mood prior to the release Friday of the U.S. government’s employment data for November, said Ryuta Otsuka, a strategist at Toyo Securities.

Many analysts forecast that the upcoming U.S. economic data will be strong. Nonfarm payrolls are expected to increase by around 185,000 from the previous month, brokers said.

“There are worries that Wall Street may come under heavy selling pressure if the jobs report turns out better than market expectations and rekindles concerns over an early reduction of the U.S. Federal Reserve’s quantitative easing measure,” Otsuka said.

Falling issues far outpaced rising ones 1,303 to 352 in the first section, while 109 issues were unchanged.

Volume decreased slightly to 2.467 billion shares from Wednesday’s 2.540 billion.

JGBs inch lower

Japanese government bonds moved slightly lower Thursday even though an auction of a new 10-year JGB issue turned out to be solid.

The lead December futures contract on 10-year JGBs finished down 0.04 point from Wednesday at 144.82. Volume surged to 40,507 contracts from 31,372.