Tokyo stocks fell 3.6 per cent to a 16-month closing low today, with disheartened investors bailing out of the market after the Bank of Japan's emergency moves the day before failed to curb the yen's strength.
The Nikkei booked its biggest daily percentage fall since early June, and it slid 7.5 per cent this month, its worst month since May. The Nikkei is one of the worst performers among major indexes in the world this year.
Disappointment set in after the BOJ expanded its fund supply tool, widely seen as an ineffective move, while the government's promise to use reserve funds for jobs and deregulation also failed to impress.
The benchmark Nikkei shed 325.20 points to 8,824.06, its lowest finish since April 28th, while the broader Topix lost 3 per cent to 804.67.
The dollar slipped 0.6 per cent against the yen to 84.10 yen, within sight of last week's 15-year low of 83.58 yen.
US stocks fell in the year's lightest volume yesterday as worries about the pace of recovery overshadowed a rise in consumer spending and incomes.
Market players said the Nikkei could test the 8,800, around a 16-month low hit last week, at some point this week although some light buying by pension funds was likely and may offer support at the lows.
Below 8,800, the next target is 8,697, a 61.8 per cent retracement of the Nikkei's rally from its March 2009 low to its April 2010 high.
The Nikkei joins Chinese stocks in being among the worst of major stock indexes.
The Shanghai Composite Index has shed about 19 per cent this year, while the Nikkei has lost around 16 per cent and the Dow Jones industrial average is 4 per cent lower.
Among sectors worst-hit this year are high-tech shares, vulnerable both to a strong yen and economic chills. The precision machinery subindex hast lost about 20 per cent.
Exporters took a beating. Canon dropped 4.5 per cent to 3,425 yen and Kyocera slid 4 per cent to 7,140 yen. Sony lost 3.7 per cent to 2,368 yen.
PC memory maker Elpida tumbled 7.3 per cent to 1,009 yen as prices of DRAM (dynamic random access memory) chips continue to drop on a sluggish outlook for PC demand.
The Nikkei business daily reported DRAM prices in the second half of August were about 2 percent lower than the prices in the first half.
Chip-tester maker Advantest lost 5.3 per cent to 1,594 yen and Tokyo Electron shed 5.7 per cent to 3,940 yen.
ome 1.6 billion shares changed hands on the Tokyo exchange's first section. Declining shares outnumbered advancing ones by nearly 32 to 1.
Reuters