Tokyo stocks tumble, dollar falls
TOKYO (AP) _ An overnight plunge on Wall Street and investor pessimism over Japan’s economy combined to push Tokyo share prices sharply lower today. The dollar fell against the yen amid growing worries over U.S.-Japan trade tensions.
After the stock market closed, Japan’s Economic Planning Agency reported the nation’s gross domestic product contracted by 2.9 percent in the April-June period from the prior quarter, a shrinkage of 11.2 percent on an annual basis.
The market opened lower after the Dow Jones industrial average closed at 7,719.28 points Wednesday, down 132.63.
``The Tokyo market is following any negative moves in New York,″ said Yoshihito Sato, general manager of the management planning group at Matsui Securities Co.
The Nikkei Stock Average of 225 selected issues shed 422.54 points, or 2.26 percent, closing at 18,282.23. On Wednesday, the index had edged up 8.80 points, or 0.05 percent.
Today’s decline in the Nikkei was accelerated by massive selling by domestic institutional investors locking in profits ahead of the end of Japan’s fiscal half-year on Sept. 30.
Among losers were high-technology issues, including Sony and TDK, telecommunications and major real estate stocks. Gainers included some retailers, including Takashimaya and Ito-Yokado.
Trading was light, with an estimated 380 million shares changing hands on the first section, compared with Wednesday’s 335 million. Declines overwhelmed advances 953 to 189, with 115 issues unchanged.
The Tokyo Stock Price Index of all issues listed on the first section was down 25.35 points, or 1.76 percent, to 1,415.68. It had slipped 0.18 points, or 0.01 percent, the previous day.
In currency dealings, the dollar fell below 119 yen on selling in the afternoon after critical comments by a U.S. official about Japan’s trade patterns.
``Clearly Japan is pursuing export-led growth. ... This is not a viable strategy, politically or economically,″ the official told AP Dow Jones during a recess in Japan-U.S. talks on economic deregulation in Tokyo. The official spoke on condition of anonymity.
Traders said the market remains especially sensitive to news regarding the Japan-U.S. relationship ahead of next week’s meeting of finance ministers from the Group of Seven major industrialized nations.
Finance ministers, joined by central bankers, from the United States, Japan, Germany, Britain, France, Italy and Canada will meet in Hong Kong on Sept. 20.
In times of trade tensions, the markets look for downward pressure on the dollar. A weaker dollar tends to make U.S. products cheaper in Japan and Japanese goods more expensive in the United States.
There was some dollar-buying in the morning as Japan’s July current account surplus turned out to be a little smaller than expected.
The Finance Ministry said today that the surplus increased 62.7 percent in July from the same month last year to $7.6 billion. Economists had forecast $8.3 billion.
In late afternoon, the dollar was trading at 118.92 yen, down 0.35 yen from late Wednesday in Tokyo and also below its late New York level of 119.31 yen overnight. It ranged between 118.56 yen and 119.28 yen in today’s trading.
The yield on the benchmark No. 182 10-year Japanese government bond closed at 2.025 percent, up from 2.020 percent Wednesday. Its price fell to 106.70 from 106.75 yen.