Share prices here plummeted to their largest point drop of the year Friday as domestic wrangling and worries of a global stock market meltdown pushed the Tokyo Stock Exchange’s key Nikkei average below the 14,000 line.
As Wall Street’s tumble overnight carried over into Tokyo, the 225-issue Nikkei average sank 749.05 points, or 5.1 percent, to end the day at 13,916.98, its second-lowest close of the year. Its lowest post-bubble era close was 13,915,63 on Aug. 28.
Trading in foreign exchange markets started quietly Friday morning but heated up in the afternoon as the dollar plunged against the yen in Tokyo on various fears, among them that the stock drop would set off a global stock market plunge, that U.S. Treasury Secretary Robert Rubin is suggesting a change in U.S. foreign exchange policy toward a stronger dollar, and that New York stocks would resume their decline from Thursday.
So fast was its plunge that a span of nearly 6 yen was bridged as the dollar dropped from a low near 134 yen to hit 128.80 yen within only half an hour.
At 5 p.m., the U.S. unit stood at 130.76-79 yen, down sharply from 135.69-71 yen late Thursday in Tokyo. The dollar was mostly traded at 134.35 yen, compared with 135.35 on Thursday.
The ongoing spectacle over the possibility that U.S. President Bill Clinton may be impeached for perjury in the Monica Lewinsky affair brought further negative sentiment to markets in Tokyo, as did the extended and time-consuming negotiations between the government and opposition parties over key financial bills Japan needs to implement to correct the banking sector and improve the economy.
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.