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Japan's benchmark Nikkei drops after sharp fall on Wall Street last week

Japan's benchmark Nikkei drops after sharp fall on Wall Street last week

Japan's benchmark Nikkei index fell to its lowest level for the year Monday after last week's sharp fall in share prices on Wall Street and as a stronger yen prompted traders to sell exporters.
The Nikkei 225 index lost 584.91 points, or 3.8 percent, to 14,998.51 during the early afternoon session on the Tokyo Stock Exchange. It later recovered slightly to 15,067.28, down 3.3 percent from Friday's close.
Traders took their cues from Wall Street, where the Dow Jones industrial average fell 1.7 percent Friday. Major banks had warned of further losses in their debt portfolios, raising investor concerns that the credit market slump shows no sign of abating.
The sharp drop is "mainly due to Friday's plunge on the U.S. market and the stronger yen," said Shoji Yoshigoe, general manager at Mitsubishi UFJ Securities.
Among the early decliners in Japan were exporter issues due to a strengthening yen, which is at its highest levels against the dollar since May, 2006. Electronics maker Sharp Corp. was down 3.8 percent and steel maker Nippon Steel was off 5.6 percent at the end of the morning session.
"I'm afraid factors from overseas, such as subprime problems, are coming over to Japan. We'll closely monitor the situation," said Chief Cabinet Secretary Nobutaka Machimura.
Japan's economic fundamentals are "not so bad," and "the stronger yen, though it's tough on exporters, is basically good for our country because it means Japan is at higher value," he said.
Machimura said he was not trying to guide the currencies to any specific levels.
The broader Topix index of all the Tokyo Stock Exchange's First Section issues shed 52.37 points, or 3.50 percent, to 1,441.97.
The dollar was trading at 110.59 yen at 12:50 p.m. Monday (0350 GMT), down from 111.07 yen late Friday in New York. The euro fell to US$1.4663 from US$1.4673.


Updated : 2021-10-23 23:40 GMT+08:00