Fears of a synchronized global stock market rout sent Tokyo share prices into free fall Friday, driving down the Nikkei average to its lowest level in more than 12 years.
With steep falls overnight on Wall Street spilling over into Tokyo, the benchmark 225-issue Nikkei average tumbled 498.16 points, or 3.5 percent, to end the day at 13,915.63.
It was the first time since March 7, 1986, that the key market gauge fell below the 14,000 level. The Nikkei lost 1,382.57 points for the week, plunging more than 1,000 points in the past three days.
On the currency market, the dollar was changing hands at 143.30-33 yen at 5 p.m., down from 143.65-68 yen late Thursday. The greenback had plunged more than 2 yen at one point during the day.
As for Wall Street, the Dow Jones industrial average plunged more than 4 percent Thursday amid worries over Russia’s economic and political crisis.
Concern over banking industry problems and bleak prospects for the economy were blamed for the Tokyo market’s continued decline. In the market’s view, Japan’s failure to clear a “soft landing” for troubled banks and to get the economy back on track will exacerbate already crisis-stricken Asian economies and prompt a global depression.
Judging from Russia’s relatively small share of the world’s total economic activity, investors’ reactions to its financial crisis have been too excessive, said Hideaki Akimoto, chief strategist with Daiwa Institute of Research Ltd.
Basically, the largest demoralizing factor in Tokyo is the stalled Diet debate over the proposed bills to restructure the nation’s ailing banking system, Akimoto said. The world is now keeping a wary eye on Japan’s political wrangling, which is clouding world economic prospects, he said.
Masaaki Higashida, an analyst with Nomura Securities Co., shared the view but sounded a somewhat optimistic note over near-range prospects.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.