Tokyo stocks dive more than 5% on fears over US economy

Last Updated : 25 December 2018, 04:42 IST

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Tokyo's benchmark Nikkei 225 index plunged more than five percent in morning trade Tuesday amid rising doubts about the US economy and fears sparked by a US government funding crisis.

At the midday break, the Nikkei index was down 5.05 percent or 1,018.74 points at 19,147.45, after dipping to as low as 19,138.88 -- the lowest level since April 2017.

The broader Topix index dipped 4.99 percent or 74.27 points to 1,413.92 by the break.

Analysts had warned that the Japanese market would be volatile after steep falls on Wall Street on Monday, and with a higher yen against the dollar weighing on sentiment.

But Makoto Sengoku, market analyst at Tokai Tokyo Research Institute, admitted surprise at the scale of the rout.

"I didn't expect the market would tumble this much," he told AFP.

"There are no signs of selling running its course or big buyers emerging."

The dollar fetched 110.13 yen in midday Tokyo time, down from 110.43 yen in New York on Monday and 111.38 yen in Asian trade on Friday.

The Tokyo market was closed on Monday for a national holiday.

In New York, US shares fell sharply with investors unnerved by weekend reports that US President Donald Trump had asked about the possibility of firing Federal Reserve Chairman Jerome Powell.

The dive also came after Treasury Secretary Steven Mnuchin's efforts to reassure investors fell flat.

Mnuchin was widely panned by market watchers over a phone call with the six biggest US banks, reporting on Twitter that the six CEOs have "ample liquidity" available.

The move "prompted worries in the market," Toshiyuki Kanayama, senior market analyst at Monex, said in a note.

Automakers were among losers, with Toyota dropping 5.31 percent to 5,075 yen, Honda down 5.20 percent at 2,769.3 yen and Nissan off 5.00 percent at 838.7 yen at the break.

Sony was down 5.18 percent at 5,021 yen and Panasonic was down 5.17 percent at 923.8 yen at the break.

Published 25 December 2018, 02:41 IST

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