TOKYO – Japan's benchmark stock index closed down 5 percent Friday with investors dumping stocks after the central bank's smaller-than-expected cut in its key interest rate.
The Nikkei 225 index lost 452.78 points to close at 8,576.98 points.
Japanese stocks were modestly lower for much of the day but losses accelerated after the Bank of Japan announced it had reduced the uncollateralized overnight call rate to 0.3 percent, the first cut in more than seven years.
"The move fell short of the widely expected cut to 0.25 percent," said Yumi Nishimura, market analyst at Daiwa Securities SMBC. "But the market also welcomed the move as a step to stay in line with the rest of the world."
The central bank warned that "adjustments in the world economy stemming from financial crises in the United States and Europe have further increased in severity."
Nishimura said the Nikkei's drop Friday was also a brief break after the hefty gains earlier this week.
The Nikkei soared 10 percent Thursday, closing at 9,029.76 for its third consecutive gain, lifted by a U.S. rate cut and hopes for a similar move in Japan. The index advanced 26 percent over the three days.
The U.S. Federal Reserve on Wednesday slashed its key interest rate by half a percentage point to 1 percent, a level seen only once before in the last half-century, aiming to shore up the world's largest economy as it slips into recession.
Exporters including autos and technology issues were among decliners Friday as the yen gained against the dollar.
A strong yen hurts Japanese exporters by eroding their dollar-denominated overseas earnings when converted back to the Japanese currency.
Honda Motor Co. fell 13 percent, and Mazda Motor Corp. declined 13.8 percent. Electronics maker Pioneer Corp. dropped 15.2 percent, and Nikon Corp. lost 18.1 percent.
The broader TOPIX index of all first section issues closed down 3.6 percent to 867.12 points.
No comments :
Post a Comment