Tokyo stock prices continued to take a beating Thursday, as sharp declines on Wall Street overnight coupled with indications of a faltering economic recovery at home depressed the benchmark stock index to below the 13,500 mark, the lowest closing in over 23 months.
The 225-issue Nikkei average plummeted 491.22 points to end the day at 13,423.21, after shedding more than 700 points, or 5.3 percent, to 13,182.51 at one point in afternoon trading.
The broader-based Topix index lost 34.15 points to close at 1,255.16.
On Wednesday, the Nikkei average closed down 217.94 points, or 1.54 percent. Brokers said a deluge of selling hit a broad range of sectors, mainly high-technology issues.
"Investors who had bought high-tech stocks on margin had no choice but to dump their other holdings as they faced the risk of additional margin calls following the recent plunge in the high-tech sector," said Hiroichi Nishi, head of the products group at Nikko Securities Co.
Government officials tried to play down the market plunge, with Chief Cabinet Secretary Yasuo Fukuda telling a morning news conference that the recent Tokyo stock price falls are partly due to a plunge in foreign markets and that the fundamentals of the Japanese economy are sound.
"We believe the recent drop in stock prices is partly because of the impact of foreign markets," the top government spokesman said after the Nikkei plummeted to 13,614.27 in the first 15 minutes of trading.
"Domestically, the fundamentals are by no means bad," he reckoned, adding that the government still places importance on steps to boost the economy and that it is closely following moves in share prices.
"We have given thorough consideration to the economy in the extra budget that has cleared the Diet, and the budget for the next fiscal year that is being compiled at the moment," Fukuda said.