Tokyo stocks end down 1.7%

Tokyo shares fell 1.68 percent to their lowest level in nearly five months, although early losses narrowed ahead of a US Federal Reserve policy board meeting later in the global day.

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Tokyo shares fell 1.68 percent to their lowest level in nearly five months Tuesday, although early losses narrowed ahead of a US Federal Reserve policy board meeting later in the global day.

The Nikkei-225 index of the Tokyo Stock Exchange, which had plunged more than four percent after opening, closed down 153.08

points at 8,944.48.

It was the benchmark index's lowest close since March 15, days after a massive earthquake and tsunami tore into northeast Japan.

The Topix index of all first-section issues fell 1.59 percent or 12.47 points to 770.39.

Investors were nervous that the US economy may slide into another recession after a US credit downgrade by Standard & Poor's on Friday sent shockwaves through markets already roiled by Europe's debt crisis.

“There is a sense of a market panic that may be triggering more selling than... necessary,” said Yutaka Yoshii, general manager at Mito Securities.

Yoshii however said some investors were eyeing the possibility of a technical rebound depending on what measures the US Federal Reserve announces following its policy board meeting later Tuesday.

UBS chief strategist Shoji Hirakawa said “the key is whether the US Fed will come out with measures, not only to increase liquidity, but to turn around economic conditions.”

He said it was possible the US central bank may decide on a third round of monetary easing.

Shares in key markets such as the United States and Japan are “nearing their technical bottoms,” he added.

Japan's Finance Minister Yoshihiko Noda said he was watching markets closely and staying in contact with monetary authorities abroad.

He also denied a news report on Tuesday that he intends to resign soon and attempt to succeed unpopular Prime Minister Naoto Kan.

Tokyo Electric Power Company (TEPCO) ended flat at 389 yen after falling nearly 14 percent on expectations of a big loss for the the April-June quarter as it faces huge compensation costs for the Fukushima nuclear disaster.

Minutes before the market closed, the utility announced its quarterly net loss for the three months to June reached 571.8

billion yen ($7.4 billion), almost in line with earlier news reports.

Oil companies fell on sharp declines in crude prices, with Inpex down 5.51 percent at 497,000 yen and JX Holdings off 4.15 percent at 484 yen.

Financials also fell amid concerns over a global economic slowdown, with Nomura Holdings losing 3.82 percent to 327 yen.

Stocks plunged around the world on Monday.

On Wall Street the Dow Jones Industrial Average fell 5.55

percent Ä its biggest one-day drop since late 2008 Ä while the broader S&P 500 fell 6.7 percent and the tech-heavy Nasdaq dived 6.9 percent.

The euro bought $1.4236 in Asian afternoon trade Tuesday, up from $1.4179 in New York late Monday. The dollar eased to 77.29 yen from 77.68 yen in New York. - Sapa-AFP

Source: http://www.iol.co.za/tokyo-stocks-end-down-1-7-1.1114188

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