JAPAN: Japan's Nikkei index down to a three-week low after a fall on Wall Street
- 00:01:31
- ITN Source
JAPAN: Japan's Nikkei index down to a three-week low after a fall on Wall Street
Japan's Nikkei average falls nearly 3 percent as the yen surges against the dollar. Japan's Nikkei average fell 2.8 percent to a 3-week low on Monday (September 10), led by slides for exporters such as Sony Corp., following a jump in the yen against the dollar and a sharp decline on Wall Street. A sharper-than-expected 0.3 percent contraction in Japan's economy in the second quarter, which was announced earlier Monday, added to the negative sentiment. Investors sold exporters after the dollar fell 0.5 percent from late U.S. trade to around 112.75 yen, sliding back towards a 14-month low of 111.60 yen, threatening to cut into profits made by Japanese companies abroad. Analysts say the rising yen is a concern for the stock market, adding investors are waiting to see at which point the market will hit the second bottom, following the recent low marked on Aug. 17. Sony shares slid 5 percent in the morning trade session after U.S. employment data on Friday (September 7) showed the first decline in four years, leading to a slump on Wall Street while stoking expectations for a hefty Federal Reserve rate cut this month. The benchmark Nikkei fell 342 points to 15,779.94 at 0420GMT. The broader TOPIX index shed 2.6 percent to 1,516.15. The Nikkei had dipped as low as 15,651.83, still above a one-year low of 15,262.10 marked on Aug. 17. Earlier in the day, the government announced that Japan's economy contracted more than expected in the second quarter, reinforcing views that the Bank of Japan is unlikely to raise interest rates next week amid a global credit squeeze and market fall-out. Gross domestic product (GDP) in April-June was marked down to a fall of 0.3 percent from an initial estimate of 0.1 percent growth. Economists had expected a weak number, after a sharp slide in corporate capital expenditure data last week, but it was bigger than the market's median forecast for a 0.2 percent contraction. The fall, which came after two straight quarters of expansion, cast doubt over the strength of Japan's corporate sector.
ITN Source | September 10, 2007
