WORLD

Tokyo stocks down more than 3% by break, extending global slump

By Korea Herald
  • Published : Feb 3, 2016 - 14:23
  • Updated : Feb 3, 2016 - 14:23

TOKYO (AFP) - Tokyo stocks slumped more than three percent Wednesday morning, extending a drop on global markets as a stronger yen hit exporters and falling oil prices reignited worries about the world economy.

As the euphoria of Friday's Bank of Japan stimulus faded, oil's fresh collapse below $30 a barrel hammered energy shares and investor confidence.

"Since the BoJ cut last week, markets have been on edge, concerned that the global situation is considerably worse than initially envisaged and that global central banks will be unable to combat deflationary risks driven by plummeting oil prices," said Mark Smith, a senior economist at ANZ Bank New Zealand, according to Bloomberg News.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange tumbled 3.14 percent, or 556.51 points, to 17,194.17 by the break.

The Topix index of all first-section shares dived 3.26 percent, or 47.29 points, to 1,404.75.

Financial markets in Europe and on Wall Street took a hammering on Tuesday, continuing one of the worst starts to a year in recent history, as China's bumpy economic slowdown and weak global growth also deflated investor spirits.

The uncertainty stoked yen buying as traders sought out a currency seen as a safe bet in times of turmoil.

In Tokyo, the dollar fetched 119.63 yen, down from from 120.01 yen Tuesday in New York and 120.96 yen on Monday.

But the yen's rise hurt shares in Japanese exporters as it shrinks the value of their repatriated overseas earnings.

Toyota sank 5.09 percent to 6,932 yen, rival Nissan tumbled 5.41 percent to 1,117 yen, Sony dropped 2.72 percent to 2,619 yen, while banking giant Mitsubishi UFJ fell 3.00 percent to 561 yen.

Oil-linked shares also fell. Energy explorer Inpex sank 2.63 percent to 974.1 yen and JX Holdings fell 2.48 percent to 431.5 yen.