• SHARE

The benchmark 225-issue Nikkei stock average fell to a new 17-year closing low Monday, reflecting concern over the economies of Japan and the United States.

The 225-issue Nikkei Stock Average fell 187.60 points, or 1.64 percent, to 11,257.94, the lowest closing since Dec. 11, 1984, when it ended at 11,250.83.

The broader Tokyo Stock Price Index (Topix) of all first section issues fell 14.66 points, or 1.25 percent, to 1,155.15, its lowest close since March 8, 1999, when it ended at 1,147.75.

The Nikkei touched the day’s low of 11,239.45 shortly after the market opened, following Friday’s plunge in New York’s technology-heavy Nasdaq composite index, which closed below 1,900 for the first time in more than four months.

The Dow Jones Industrial Average was also sharply down on growing concerns over U.S. corporate earnings.

The key market gauge turned upward at that level due to bargain-hunting, “but the upward momentum was not strong enough to lift it into plus territory,” Hiroichi Nishi, general manager of the products group at Nikko Securities Co., said.

The Nikkei’s high for the day was 11,358.09.

“Investors also worry about deterioration in earnings by Japanese firms, leading Tokyo share prices lower,” Nishi said.

“The point is whether the government will be able to map out powerful economic measures to urge investors to buy back stocks.”

Volume on the main section fell to 538.41 million shares from Friday’s 765.15 million shares, with investors staying on the sidelines ahead of Tuesday’s meeting of the U.S. Federal Open Market Committee, brokers said. Falling issues outnumbered advancing issues 982 to 321, while 153 issues closed the day unchanged.

The plunge in the Nasdaq weighed heavily on information technology issues in Tokyo, with NTT DoCoMo, Japan Telecom and Softbank hitting record lows.

Toshiba, the volume leader, fell 24 yen to 561 yen. Fujitsu, second in volume, rose 34 yen to 1,245 yen following the announcement of its restructuring plan, including a massive workforce cut.

Banks, glass makers and real estate firms also faced selling.

“Investors are selling IT issues, while they are buying several defensive issues” that are not heavily affected by the economic state, Nishi said.

Gainers included Kao, Fujisawa Pharmaceutical, Nissin Food Products and Japan Tobacco.

The market’s focus is now on the extent to which the U.S. Federal Reserve will cut the federal funds target rate, which will be set at the FOMC meeting, brokers said.

“New York share prices may fall if the margin of the rate cut is 0.25 percentage point, as widely expected, because investors have already factored in the move,” Nishi said.

Meanwhile, some brokers said a 0.50 percentage point cut may stir concerns among market players that the U.S. economy is worse than they believed.

The second section index lost 7.42 points to close at 1,976.50 on a volume of 12.61 million shares. In Osaka, the near-term September Nikkei 225 index futures contract fell 190 points to 11,240.

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.

SUBSCRIBE NOW