After Wall Street Plunge, Japanese Market Follows
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
TOKYO (AP) – Japan’s main stock index fell sharply Friday morning in the wake of one of Wall Street’s biggest losses of 2007.
The Nikkei 225 index lost 410.86 points, or 2.32 percent, on the Tokyo Stock Exchange, to end morning trading at 17,291.23 points.
Earlier in the session, the index lost more than 2.5 percent. The index fell 0.9 percent Thursday.
Prices tumbled after Wall Street suffered one of its worst losses of the year Thursday as investors succumbed to months of worry about the mortgage and corporate lending markets.
The Dow plunged 311.50 points, or 2.26 percent, to 13,473.57, its worst close since its 416.02 point drop on Feb. 27, when a fall in the Shanghai stock market rattled world exchanges.
Analysts said Japanese stock markets also suffered amid the dollar’s weakness against the yen and political uncertainty in Japan over the fate of Sunday’s parliamentary elections.
The dollar edged down in New York due to worries about the troubled housing market, and the currency fell further in Tokyo. The dollar was trading at 118.96 yen late Friday morning in Tokyo, down from 119.46 yen late Thursday in New York.
Export-sensitive shares were badly hit, as a weaker dollar tends to shrink Japanese exporters’ overseas income and makes their products less competitive abroad. Technology issue Fujitsu Ltd. fell 6 percent, and automaker Honda Motor Co.’s shares lost 2.9 percent.
Some companies may have to lower their earnings outlooks in coming quarters if a stronger yen persists, said Hiroyuki Fukunaga, chief strategist at Rakuten Securities.
“A stronger Japanese yen has a greater impact on today’s Nikkei than overnight losses on U.S. stocks,” Fukunaga said.
The broader Topix index, which includes all shares on the exchange’s first section, was down 36.02 points, or 2.07 percent, at 1,701.16 points. Topix lost 0.68 percent the day before.
Recent newspaper polls have predicted that the long ruling Liberal Democratic Party could win fewer than a third of the seats contested in Sunday’s upper house elections. An election defeat would not immediately threaten its hold on power, but Prime Minister Shinzo Abe could face pressure to resign from other leaders within his party and from the public.
