Japan Plunges 5.4%

123jump.com Staff
17 Aug, 2007
New York City

Nikkei 225 Index fell to six-year low after plunging 5.4% or 874 points to 15,273.68. Export sensitive stocks led the decline in the market. Of the 225 stocks in the index, 200 stocks fell and only 23 managed to gain, 33 stocks fell more than 10%. Yen firmed to 111 against dollar. The Bank of Japan injected addditional 1.2 trillion yen of liquidity in the market.

[R]7:00AM New York, 8:00PM Tokyo-Massive sell-off sends Japan into doldrums, lowest levels in 6 years. Yen continue firming. The Bank of Japan injects 1.2 trillion yen to improve liquidity and stem interest rates increase.]/R]

Japanese shares hit fresh 6-year lows, as exporters, steel and ship building stocks fell relentlessly on firming yen. Early morning gains in financials were wiped off in afternoon trade, as the U.S. mortgage market problems continue causing mayhem in global shares. Japan plummeted 5.42%. Of 225 shares 200 crashed, 23 gained and 2 were unchanged. Of the stocks in the index, 33 shares fell by more 10% while 86 stocks dropped by between 5% and 9.9%. The Topix fell 5.5%.

In Tokyo trading Nikkei 225 plunged 5.42% to 15,273.68, the biggest decline in 6 years. Landslide declines in exporters mostly, underpinned the fall. The yen firmed to 111 against the dollar from 116 earlier in the week. In the morning, the yen had strengthened to 112. Yesterday it fluctuated between 114 and 113 yen per dollar. For the week the yen has gained 4.2%. The Bank of Japan injected 1.2 trillion into the market to ease liquidity and cool heating rates. Yesterday the Bank of Japan added 400 billion into financial system. But rates remained high, failing to fall below the BOJ target rate of 0.5%.

Japan and South Korea financials architects are due to meet early next week in the wake of financial markets volatility that has caused huge losses amongst investors in the region. Over 250 Japanese delegates will also visit several Asia states to discuss bilateral and investment issues. Japan will extend 400 billion-yen concessionary-rate loan to India as development aid.

Of the stocks Nikkei 225, exporters fell heaviest against a rising yen on expectations foreign earnings will crumble. Sumitomo Met min led losses crashing 16.4% followed by Mitsui ENG Shipb down 15.68%. Hitachi Zosen sank 14.68% while Japan Steelwork lost 13.9% and NGK Insulators falling 13.6%. Carmakers Toyota and Honda fell sharply too. Financials faltered to deceive having regained some lost ground in early morning trade. Most ended in the negative at close. Mitsubishi UFJ F shed 4.5%. At least 13 shares gained by between 1% and 4% while 10 increased below 1%. KDDI led up 3.7% followed by Nippon Paper GRO up 2.82% while Credit Saison inched higher 2.7%. East Japan Rail added 2.7%.

Mitsukoshi Ltd and Isetan Co. are in merger talks to be settled in the ratio 0.3 to 1, according to Nikkei Net Interactive. Isetan Co rose 0.34% in Tokyo.