TOKYO, Jan 4 — Tokyo’s key Nikkei index plunged more than three per cent in opening trade today, hit by a surge in the yen and sell-offs on Wall Street amid worries over the US economy.
In its first trading session of 2019, the benchmark Nikkei 225 lost 3.32 per cent, or 665.37 points, to 19,349.40 as it was catching up with other markets after the New Year’s break.
The broader Topix index lost 2.93 per cent, or 43.72 points, to 1,450.37.
Since the last session in Tokyo on December 28, heavy selling has hit global markets.
On Wall Street yesterday, stocks plunged as China’s slowing economy forced Apple to slash its revenue forecast.
Sentiment in the United States was further dented by Institute for Supply Management data showing US manufacturing activity at a two-year low.
The weak data was “more proof, if needed, that President (Donald) Trump’s trade actions against China are now hurting the US as much as they are China,” said Ray Attrill, head of foreign exchange strategy and markets at National Australia Bank.
It is “more reason to think a Sino-US trade deal is in the offing in coming weeks,” he said in a note.
Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Centre, said the strong yen dampened sentiment greatly as it clouds the outlook of Japanese exporters.
The dollar was trading at ¥107.62 (RM4.14), hardly changed from New York yesterday afternoon but still considerably lower than the ¥110 range seen when the Tokyo market closed for the last year.
“Investors here hate the yen’s appreciation, which exasperated today’s drop,” Suzuki said, while noting many market players were yet to come back from their holidays.
“Some people may say today’s trade indicates the course of trade this year but you should take it with a pinch of salt,” he told AFP.
Apple late on Wednesday cut its revenue outlook for the latest quarter, citing steeper-than-expected “economic deceleration” in China and emerging markets, factors that have contributed to sharp falls across stock markets since late last year.
Apple’s warning contributed to a rally by the Japanese yen, which tends to benefit from a “flight to safety” when investor anxiety is high.
Big manufacturers were among the losers, with Toyota plunging 3.29 per cent to ¥6,195 and Honda down 3.18 per cent to ¥2,802.5.
Sony fell 3.85 per cent to ¥5,121. — AFP
