Stocks ended the first trading day of 2019 with heavy losses Friday as a sharply stronger yen and an overnight plunge in U.S. equities spurred broad selloffs on the Tokyo Stock Exchange.
The 225-issue Nikkei average tumbled 452.81 points, or 2.26 percent, to close at 19,561.96, after losing 773 points briefly in morning trading. On Dec. 28, the final market day of 2018, the key market gauge lost 62.85 points.
The Topix index of all first-section issues finished down 22.93 points, or 1.53 percent, at 1,471.16, after falling 7.54 points the previous trading day.
A slide in the Chinese manufacturing purchasing managers’ survey for December and weaker than expected readings in the U.S. Institute for Supply Management’s manufacturing index for the month, both released during the year-end and New Year holidays in Japan, left investors increasingly risk averse, temporarily sending the yen below ¥105 during the holiday period.
U.S. technology giant Apple Inc.’s rare downward revision to its sales outlook over sluggish iPhone sales in China also weighed on market sentiment, brokers said.
Both the Nikkei and Topix cut losses in the afternoon, helped by the yen’s weakening, higher Dow Jones industrial average futures and a rise in Shanghai stocks, brokers said.
Friday’s plunge reflected what happened over the year-end and New Year holidays, an official at a Japanese brokerage said.
The Nikkei’s downside was supported by the price-book value ratio line of 1.0, which stood at 19,240 on the index, said Mitsuo Shimizu, chief strategist at Aizawa Securities Co.
Stocks are “oversold” if the Nikkei’s PBR falls below this line, he said.
Falling issues outnumbered rising ones 1,475 to 598 in the TSE’s first section, while 56 issues were unchanged.
Volume increased to 1.551 billion shares from 1.195 billion shares on Dec. 28.
Apple-related issues met with heavy selling after the U.S. company lowered its sales forecast for October-December. Murata Manufacturing lost 9.80 percent and TDK sagged 4.40 percent.
China-linked issues suffered sharp losses following the weak Chinese purchasing managers data. Major losers included industrial robot producer Fanuc and construction machinery-maker Komatsu.
Other major losers included automaker Subaru and game maker Nintendo.
By contrast, road transport companies held firm as investors sought safe bets amid the heightened risk-off mood. Major gainers included JR Tokai and JR West.
Also on the plus side were power utility Tepco and drugmaker Takeda.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average slumped 360 points to end at 19,480.