Tokyo’s Nikkei dives 12.4 per cent, suffers record points loss
- Japanese exporters fell after a rally in the yen as the Bank of Japan raised interest rates for the second time in 17 years, with talk of another rate hike to come
Tokyo stocks sank more than 12 per cent on Monday, battered by a resurgent yen and weak US jobs data that fuelled fears of a recession in the world’s top economy.
The benchmark Nikkei 225 index plunged 12.40 per cent, or 4,451.28 points, to 31,458.42 – its largest points drop in history – while the broader Topix index lost 12.23 per cent, or 310.45 points, to 2,227.15.
The yen surged to 141.73 against the dollar, a level not seen since early January, from 146.52 yen in New York on Friday.
The Japanese currency has rapidly appreciated from levels of near 162 in early July, its weakest value since 1986.
A stronger yen is a negative factor for Japanese exporters and the recent rally has been fuelled by central bank policy decisions that have reversed the trends of recent years.
The Bank of Japan last week raised interest rates for the second time in 17 years, with talk of another rate hike to come, while the US Federal Reserve has hinted at a cut as soon as September.
Daiwa Securities said the losses in Tokyo reflected “deepening concerns over the uncertain US economy”.