JAPAN: Nikkei books biggest loss in nine months

The Nikkei touched a new low for 2007 on Monday (March 5), sliding 34 percent, marking its biggest one-day tumble in nine months and a new low for 2007, as investors continued to hammer exporters such as Toyota Motor Corp. and Canon Inc. following the yen's rise. The sell-off pushed the benchmark share average below the psychologically important 17,000 level for the first time in nearly two months and left investors wondering when stocks will rebound. The broader TOPIX index slid 3.42 percent to 1,662.71, its lowest close since January. Japan's top government spokesman reiterated that financial markets determine the levels of stocks and currencies and declined to comment on Monday's fall in the stocks and the jump in the Yen. "Markets determine markets. The government should not comment on the levels or movements of stocks and currencies," said Chief Cabinet Secretary Yasuhisa Shiozaki at a regular morning press conference. Individual investors such as 60-year-old Koji Tsushima said they were surprised at the continuous fall in stocks. "I feel uneasy. The stock is declining rapidly." he said. "As one of the stock holders, I am so shocked. I should have sold some stocks. I never thought the stocks would slide in this early stage although I had expected it would go down during March." added 42-year-old Shingo Fujiwara. The yen touched 115.37 to the dollar on Monday, its highest in three months. A stronger yen is a minus for exporters as it eats into profits when earnings from abroad are brought home. Toyota fell three percent to 7,480 yen. The world's most profitable auto maker makes nearly three-quarters of its sales outside of Japan. Office equipment maker Canon, which makes nearly 80 percent of it sales overseas, dropped 1.9 percent to 6,140 yen. Shares of SMC Corp. fell 3.8 percent to 15,020 yen. The maker of pneumatic equipment said on Friday a state-backed body would sell about $133 million worth of its shares in a secondary offering later this month.

ITN Source | March 5, 2007

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