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Tokyo stocks tumble on Wall Street sell-offs

JIJI

Stocks fell sharply on the Tokyo Stock Exchange Monday on the heels of a plunge in U.S. equities late last week, pushing the benchmark Nikkei average down below 23,000 to its lowest level in more than a month.

The 225-issue Nikkei tumbled 592.45 points, or 2.55 percent, to finish at 22,682.08, hitting the lowest closing level since Dec. 15 last year. On Friday, the key market gauge lost 211.58 points.

The Topix index of all first-section issues closed down 40.46 points, or 2.17 percent, at 1,823.74, after shedding 6.24 points the previous trading day.

Stocks met with heavy selling from the outset of Monday’s trading after the Dow Jones industrial average plunged 665 points Friday amid concerns over a faster pace of U.S. interest rate hikes. Such worries were fueled by a steep increase in wages shown in the U.S. government jobs data for January released Friday, brokers said.

The Tokyo market stayed deep in negative territory throughout Monday, while its downside was underpinned by buying on dips and hopes for exchange-traded fund purchases by the Bank of Japan, market sources said.

Monday’s plunge “probably won’t lead to a further slump” in Tokyo stock prices, stressed Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

Ota indicated his belief that the Tokyo market will rebound soon, saying Japanese stocks are now seen as undervalued following their sharp falls, providing investors with a “great opportunity” for bargain hunting.

Yutaka Miura, senior technical analyst at Mizuho Securities Co., noted that the Tokyo stocks were affected by the U.S. market’s correction phase after its recent rapid advance.

“The Nikkei could fall to levels close to 22,000” in the near future in line with expected falls in U.S. stocks, Miura warned, while predicting that the correction phase will end in about a week.

Falling issues overwhelmed rising ones 1,930 to 118 in the TSE’s first section, while 17 issues were unchanged.

Volume rose to 1.881 billion shares from 1.702 billion shares Friday.

Fast Retailing lost 4.28 percent after same-store sales at its Uniqlo casual wear chain declined year on year in January.

Nonferrous metal firm Fujikura plummeted 16.56 percent following Friday’s announcement of a downward revision in its operating profit estimate for the year through March.

Oil companies Japex Co., Inpex Corp., JXTG Holdings Inc., Idemitsu Kosan Co. and Showa Shell Sekiyu KK were also downbeat, reflecting lower crude oil prices.

By contrast, automaker Honda rose 2.08 percent after announcing Friday an upward revision in its net profit forecast for the year through March.

Other major winners included electronics and entertainment giant Sony and chemical maker Ube Industries.