Volatile trade costs Nikkei crucial level

TOKYO's Nikkei average ended below the key psychological support level of 18,000 yesterday for the first time since March 16, after a day of volatile trading.

The sell-off came in the final half-hour after a Reuter report quoted a Finance Ministry official as denying that the Government might allow banks to package bad debts into securities and sell them at a discount.

The earlier report, carried in the evening edition of the Nihon Keizai newspaper, had sent shares soaring in early afternoon trade.

The benchmark Nikkei 225 average fell 225.19 points or 1.24 per cent to 17,941.19 while the broader-based Tokyo Stock Price Index of all issues ended 11.73 points lower at 1,539.59.

Adding to declines was a report that Japan was resisting US calls for a large income tax cut.

Foreign investors were also discouraged by poor financial results announced by major Japanese companies for the six months to September. Hong Kong securities firms and European banks were active sellers.