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Tokyo stocks dive as yen soars, government bond yield dives


Stocks dived on the Tokyo Stock Exchange Tuesday, hurt by massive sales reflecting overseas stock tumbles and the yen’s rapid ascent amid mounting risk-averse sentiment.

The Nikkei plummeted 918.86 points, or 5.40 percent, to end at 16,085.44. It was the steepest point loss since May 23, 2013. On Monday, it gained 184.71 points.

The topix slumped 76.08 points, or 5.51 percent, to close at 1,304.33, after rising 11.44 points the previous day.

A wide range of issues met with heavy selling after U.S. and European shares fell sharply overnight amid growing concerns over the global economy spurred by tumbling crude oil prices, brokers said.

Crude oil futures in New York slipped below 30 dollars per barrel for the first time in four sessions on Monday.

Investor sentiment was also dampened by the yen’s sharp ascent against the dollar. On the Tokyo currency market, the dollar fell below ¥114.50 for the first time since Nov. 10, 2014.

The yield on the latest issue of 10-year government bonds fell into negative territory for the first time ever due to increased safe-haven buying.

Stocks lost further ground in the afternoon in an intensified risk-averse mood, with the Nikkei average tumbling over 900 points to levels just above 16,000, brokers said.

Also behind the accelerated downswing in the afternoon was a flurry of index futures-led selling by overseas funds, brokers said.

“Investor sentiment was hurt not only by tumbling crude oil prices but also by uncertainties over European banks,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

On Monday, the London market plunged due chiefly to a sharp fall in the banking sector. The tumble there affected the financial sector in Tokyo, including major banking groups, securities firms and nonbank lenders, brokers said.

Their falls were also attributed to expected deterioration in these companies’ earnings following the Bank of Japan’s introduction of the negative interest rate policy, they said.

Analysts were worried about a further drop in Japanese stocks. “The Nikkei would fall to around 15,000 if the yen firms further,” said Masayuki Otani, chief market analyst at Securities Japan Inc.

Falling issues overwhelmed rising ones 1,904 to 27 in the TSE’s first section, while six issues were unchanged.

Volume increased to 3,173 million shares from Monday’s 2,738 million shares.

All 33 sector subindexes on the first section closed lower.

Banking groups logged hefty losses on heightened concerns over dismal earnings after the 10-year government bond yield turned into negative territory, brokers said. Among them were Mitsubishi UFJ, Sumitomo Mitsui and Mizuho.

Other finance-related issues were also battered by heavy selling. They included brokerage firms Nomura and Daiwa, as well as nonbank lender Acom and insurer Dai-ichi Life.

The stronger yen dampened export-oriented names on concerns over their earnings. They included automakers Toyota, Honda and Mazda, as well as camera-maker Canon and electronics giant Panasonic.

Oriental Land, the operator of Tokyo Disneyland and Tokyo DisneySea, jumped 2.45 percent after the company said Monday it will raise ticket prices for the theme parks in Urayasu, Chiba Prefecture.

Also on the plus side were electrical engineering firm Kandenko, Nishi-Nippon Railroad and Cookpad, the operator of a cooking recipe website.

In index futures trading on the Osaka Exchange, the March contract on the Nikkei average slumped 940 points to close at 16,060.