Japan's Nikkei stock average fell 2.3 per cent today to hit a three-week closing low, with exporters hit by a stronger yen and weak consumer spending data that sparked a broad Wall Street sell-off.
In thin trade, the benchmark Nikkei shed 231.79 points to 9,802.95 after earlier falling as much as 3 per cent to 9,736. It was its lowest close since October 7th. The broader Topix fell 1.6 per cent to 880.54.
Sony sagged nearly 6 per cent as investors shrugged off the electronics maker's upward revision to its earnings forecast, instead moving to take profits.
But shares of Aiful Corp and other Japanese consumer lenders soared after a source said the government may ease regulations that have crippled the industry and raised hurdles for small businesses seeking loans.
"While shares in Asia are down, the fact that falls were limited and the yen has actually retreated a bit against the dollar have helped keep the Nikkei from sliding further," said Kenichi Hirano at Tachibana Securities.
Tokyo analysts also said that while investors had been spooked by the bankruptcy filing of US lender CIT Group and concerns about Citigroup's balance sheet, these were no longer a major market factor.
CIT's bankruptcy, one of the largest in US corporate history, had been widely expected for months, but it could further constrict credit and weigh on the fragile US economy. Accounting expert Robert Willens said Citigroup was likely to have a $10 billion fourth-quarter charge on its deferred tax assets.
The yen rose to two-week highs against the dollar around 89.20 yen in early Asian trade, but the dollar had clawed back to 90.03 yen by mid-afternoon. Investors fret about a stronger yen as it eats into exporters' profits when they are repatriated.
Japanese markets will be closed today for a holiday.
Reuters