Stocks plunged on the Tokyo Stock Exchange again Thursday, with the Nikkei closing at a 15-month low as investors took fright at the persistently low price of oil.
The Nikkei ended down 398.93 points, or 2.43 percent, to close at 16,017.26, its weakest finish since October 2014. On Wednesday, it plummeted 632.18 points.
The Topix dipped 37.48 points, or 2.80 percent, to close also at the day’s low of 1,301.49, after falling 51.44 points the previous day.
Although the Dow Jones Industrial Average turned sharply lower on Wednesday, buying outpaced selling from the outset of Thursday’s trading on the Tokyo market thanks in part to the yen’s weakening against the dollar.
The Nikkei surged more than 300 points in early afternoon trading as investors took heart from a rise in U.S. stock index futures on the GLOBEX 24-hour trading system, brokers said.
But the rally rapidly lost steam and slipped into negative territory later, with large-cap issues encountering selling from investors in oil-producing countries amid tumbling crude oil prices, they said. The market was also dragged down by a flurry of index futures-led selling, they added.
“Today, there was no fresh positive incentive other than the weaker yen,” Tomoaki Fujii, head of the corporate research division of Takagi Securities Co., said, citing the Dow’s slide and the downward spiral in U.S. crude prices.
The sharp rise in Tokyo stocks earlier on Thursday was “surprising,” Fujii said.
On the New York Mercantile Exchange on Wednesday, key crude oil futures fell to settle at $26.55 per barrel, the lowest level in 12 years and eight months.
The Nikkei average fluctuated in a range of more than 700 points on Thursday.
Mainstay issues drew buybacks in the morning on the back of the weaker yen, but selling on a rally and profit-taking took the upper hand in the afternoon as the yen’s decline came to a halt, brokers said.
The market accelerated its downswing also because Bank of Japan Governor Haruhiko Kuroda’s remarks at the day’s House of Councillors Audit Committee meeting contained nothing new, despite investor hopes for additional monetary easing by the central bank, an official at a bank-affiliated brokerage firm said.
Kuroda said that the BOJ will adjust its monetary policy without hesitation if such action is necessary to achieve its 2 percent inflation goal. The BOJ is scheduled to hold a two-day policy-setting meeting from Jan. 28.
Losers far outnumbered winners 1,860 to 60 on the TSE’s first section, while 15 issues were unchanged.
Volume increased to 3,185 million shares from Wednesday’s 2,566 million shares.
All 33 sector subindexes on the first section finished lower.
In the financial sector, banking groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho lost ground, as did leasing firm Orix, brokerage firm Nomura and nonbank lender Aiful.
Large-cap mainstay names suffered losses. They included automaker Toyota, mobile phone carriers SoftBank Group and KDDI, and electronics and entertainment giant Sony.
On the other hand, Sharp jumped 5.79 percent following a report that Taiwanese electronics manufacturing service company Foxconn Technology Group has offered to invest ¥625 billion in the Japanese electronics maker to support its business reconstruction.
Among other winners were semiconductor-related Tokyo Electron, camera maker Nikon, Asahi Glass and seafood company Maruha Nichiro.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average dived 320 points to 16,000.