Take our user survey and make your voice heard.
Tokyo stocks plunged 4.18% Tuesday after weak U.S. manufacturing data sent Wall Street and the dollar tumbling, with the headline index shedding 14% in a month after its huge rally last year.
The benchmark Nikkei-225 index lost 610.66 points to 14,008.47, marking the worst percentage loss of the year.
Just over a month after the Nikkei ended 2013 with a world beating 57% rally -- its best annual run in over four decades -- Japanese shares have entered in what analysts say is a corrective phase.
The rise of the yen against the dollar has pushed down domestic stocks through the early weeks of 2014, after the currency's sharp decline through last year boosted the market.
The dollar bought 100.80 yen Tuesday afternoon, slipping further from 100.94 yen in New York Monday afternoon and well down from 102.31 yen in Tokyo at the start of the week.
A weaker yen gives Japanese exporters the flexibility to cut prices of the goods they sell overseas and it inflates repatriated profits, while a stronger yen undercuts those gains.
The Tokyo market's decline on Tuesday came as Wall Street suffered a sell-off after a surprisingly weak U.S. manufacturing report sparked another round of selling amid concerns about the strength of the global economy.
Emerging markets have also been shaken with fears of capital flight as the U.S. central bank pulled back again on its massive stimulus spending, widely credited for buoying global stock markets.
"Investors should steer clear of risk assets over the short term as the turmoil does not look like it will be over anytime soon," Credit Agricole said.
© (c) 2014 AFP
10 Comments
Login to comment
nath
Casino indeed. Abenomics indeed. The world economy is being ruined/distorted by Central Banks and the only ones getting rich (or not losibng their shirts) are those closest to the money trough.
Wakarimasen
Almost time to get the buying shoes on.
Thunderbird2
The Pound is also falling against the Yen - it's lost about 10 Yen since the middle of last week. Makes my holiday money more expensive >.<
Louis Tan
Tomorrow 13000! It certainly looks like Shinzo Abe's Bridge is falling down but there is no fair lady. There will be a popular uprising by the people; both the wealthy who have lost money believing in the mirages he conjured up; and, the poor, who knew too well that all his policies are unworkable and will only work against them. No tears for him.
gaijinfo
Taper is on like Donkey Kong!
warispeace
Can we start to call it bABEl-nomics, as it was always nonsensical?
Jean ValJean
It's all under control, according to Abe and the rest of the Keynesian coalition.
hkitagawa
It is just Abe going to Sochi!
ThonTaddeo
Watch this sentence become the next copy-and-paste boilerplate in every article (the last one was "deflation may look good for shoppers, but...") as Abe continues to devalue his own people's savings. A stronger yen may "undercut those gains" for exporters, but a stronger yen helps every person in Japan heat their home and run their car and keep the lights on for less labor.
notasap
Those that understand the stock market know that now is the time to buy buy buy. Correction make people tons of money.