The Nikkei 225 average lost ground Friday to the lowest closing level in more than a month, pressured by selling after New York equities plunged overnight and the yen strengthened against the dollar.
The Nikkei tumbled 304.33 points, or 1.94 percent, to 15,391.56, the lowest finish since Dec. 17. The Topix closed down 22.92 points, or 1.78 percent, at 1,264.60.
The TSE opened with sharp losses after the Dow Jones industrial average fell sharply overnight amid concerns about a Chinese economic slowdown.
The selling was also attributed to the yen’s appreciation, particularly against the dollar. In New York trading overnight, the dollar briefly slipped below ¥103 for first time in more than a week.
Stocks extended losses in the afternoon, with the Nikkei average briefly falling more than 400 points due chiefly to futures-linked arbitrage unwinding as well as position-adjustment selling prior to the weekend, brokers said.
The worse than expected HSBC China manufacturing purchasing managers’ index for January, announced Thursday, “made investors risk-averse amid growing uncertainty over the course of the global economy,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
“Several negative factors overlapped,” including Wall Street’s drop, the higher yen, the sluggish Chinese economic data and selling ahead of the weekend, said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.
Suzuki also said that “heavily weighted Nikkei component names met with heavy selling after their rapid gains late last year.”
Falling issues far outnumbered rising ones 1,620 to 115 in the first section, while 44 issues were unchanged. Volume increased to 3.174 billion shares from 2.906 billion Thursday.
Daiichi Sankyo nose-dived 6.37 percent after the drugmaker said that the U.S. Food and Drug Administration has imposed an export ban on pharmaceutical ingredients manufactured by an Indian unit, brokers said.
JGBs rise further
Japanese government bonds gained further ground Friday as investors turned increasingly risk-averse amid fears of an economic slowdown in emerging countries.
The lead March futures contract on 10-year JGBs gained 0.27 point to end at 144.62. Volume dropped to 36,374 contracts from Thursday’s 44,942.