Tokyo stocks tumble more than 5% in afternoon trade
Pedestrians walk past a share price board in Tokyo on May 30, 2013. Tokyo stocks tumbled more than three percent in opening trade May 30 after falls on Wall Street and the dollar’s drop against the yen. The benchmark Nikkei 225 index lost 3.12 percent, or 446.53 points, to 13,879.93 in the first few minutes of trading. AFP/ KAZUHIRO NOGI
TOKYO – Tokyo stocks tumbled more than five percent on Thursday afternoon as jittery investors dumped shares following an overnight fall on Wall Street on the back of concerns over global growth.
The benchmark Nikkei 225 index was down 5.06 percent, or 725.54 points, to 13,600.92 in the afternoon session, while the Topix index of all first-section shares was off 3.96 percent, or 45.41 points, at 1,133.06.
The loss accelerated from mid-afternoon as a stronger yen dragged on the market — yen trade and the benchmark stock index are closely interlinked as the value of the Japanese currency directly affects the competitiveness of the country’s exporters.
Tokyo’s tumble followed on the heels of a tough session on Wall Street as the Dow Jones Industrial Average fell 0.69 percent to 15,302.80 on concerns over the global economy and recent surges in US bond yields.
The rise in US yields was “taking the wind out of equity markets generally as fixed income investments begin to look more attractive”, said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Hirokazu Kabeya, senior strategist at Daiwa Securities, said “investors still remain shaken-up” after the recent volatile trade in Tokyo, including a single day loss of more than seven percent last week.
“They don’t see any indication of the downward trend coming to a halt,” he said.
Tokyo’s bourse has soared since Prime Minister Shinzo Abe came to power in December with his pro-spending policies, notching up one of the best performances among global exchanges, but sentiment has been turned around, Kabeya said.
“Selling is gaining momentum even though there are some investors willing to pick up bargains. The market is now vulnerable to even a small shock,” he said.
The stock market losses also came after the Organization for Economic Cooperation and Development (OECD) on Wednesday trimmed its world economic growth forecast for 2013 to 3.1 percent from 3.4 percent.
The OECD also slashed its growth forecast for the world’s most advanced economies, except Japan, but said growth should pick up later this year.
In afternoon Tokyo forex trading, the dollar slumped to 100.61 yen against 101.13 yen in New York late Wednesday, while the euro also lost ground against the Japanese unit at 130.57 yen, from 130.87 yen in US trading.
