Tokyo stocks plunge 7% after US falls

A board above the trading floor shows the closing number for the Dow Jones industrial average, at the New York Stock Exchange, Friday, Aug. 2, 2024. Stocks tumbled Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to whip inflation.(AP Photo/Richard Drew)

Tokyo, Japan — Tokyo stocks fell more than seven percent in early trade on Monday, weighed down by a resurgent yen and poor US jobs data that fuelled recession fears.

The benchmark Nikkei 225 index sank 7.03 percent, or 2,523.23 points, to 33,386.47, while the broader Topix index lost 7.49 percent, or 190.01 points, to 2,347.59.

“Today’s Japanese markets are expected to start the day sharply lower due to the weakness in US equities and the strong yen,” said Monex senior market analyst Toshiyuki Kanayama.

“The key point will be whether the Nikkei 225, which has been oversold in the short-term, will correct its downward swing after the sell-off has run its course.”

READ: Tokyo plunges as equity markets track Wall St on recession fears

Daiwa Securities said the plunge in Tokyo reflected “deepening concerns over the uncertain US economy”.

On Wall Street on Friday, the Dow Jones Industrial Average finished down 1.5 percent as data showed the US jobs market cooled much more than expected in July.

The tech-heavy Nasdaq index closed 2.4 percent down, and chip-maker Intel nosedived more than 25 percent after announcing job cuts.

European stock markets also closed sharply in the red.

The dollar fetched 145.82 yen in early Asian trade, against 146.52 yen in New York on Friday.

The Bank of Japan’s decision last week to raise interest rates for the second time in 17 years — with talk of another rate hike to come — has strengthened the yen to its best level in months.

Among major shares in Tokyo, Advantest plunged 6.71 percent to 5,889 yen, Tokyo Electron tumbled 7.50 percent to 25,025 yen, and Toyota nosedived 6.57 percent to 2,415 yen.