Nikkei stock index plunges 4.18 percent
February 5, 2014, 12:14 am TWN
TOKYO--Tokyo stocks plunged 4.18 percent Tuesday after weak U.S. manufacturing data sent Wall Street and the dollar tumbling, with the headline index shedding 14 percent in a month after a huge rally last year.
The Nikkei-225 index dived 610.66 points to 14,008.47, the worst one-day drop since June. The Topix index of all first-section shares fell 4.77 percent, or 57.05 points, to 1,139.27.
“In this negative investing environment, players are merely looking for reasons to sell,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.
Just over a month after the Nikkei ended 2013 with a world beating 57-percent rally — its best annual run in more than four decades — Japanese shares have entered in what analysts say is a correction phase.
The rise of the yen against the dollar has pushed down domestic stocks through the early weeks of 2014, after the currency's sharp decline through last year boosted the market.
The dollar bought 100.80 yen Tuesday afternoon, slipping further from 100.94 yen in New York Monday afternoon and well down from levels above 105 yen at the start of the year.
A weaker yen gives Japanese exporters the flexibility to cut prices of the goods they sell overseas and it inflates repatriated profits, while a stronger yen undercuts those gains.