TOKYO, March 26 ― Japanese stocks sank more than four per cent today on profit-taking from a three-day rally, with traders also spooked after Tokyo's governor warned of a possible expansion of the coronavirus in the capital.
The Nikkei 225 index, which advanced 18 per cent from Monday to yesterday, fell 4.51 per cent, or 882.03 points, to close at 18,664.60.
The broader Topix index was down 1.78 per cent, or 25.30 points, at 1,399.32.
The market started sharply lower as investors cashed in on their recent gains, brokers said.
The rise in US shares on the Trump administration's two-trillion-dollar stimulus was a positive factor, but profit-taking erased the impact, brokers said.
Market sentiment also deteriorated after Tokyo Governor Yuriko Koike yesterday urged residents to stay home this weekend, warning of a possible “explosion” of the coronavirus after a record 41 new cases were recorded.
Koike said the Japanese capital, so far spared the draconian measures seen in other major global cities, was at a “critical stage” in containing the virus that has confined one third of the planet to their homes.
“Koike's remarks threw cold water on investors,” said Daiwa Securities chief technical analyst Eiji Kinouchi.
“Major cities around the world, notably New York, have been targeted by the new coronavirus and Tokyo alone can hardly be an exception,” Kinouchi told AFP.
The dollar fetched ¥110.69 (RM4.34) in Asian afternoon trade, against ¥111.20 in New York.
In Tokyo, shares were lower across the board with market heavyweight Fast Retailing dropping 13.16 per cent to ¥43,800 and SoftBank Group diving 9.40 per cent to ¥3,778 after sharp rallies in recent days on a stock buy-back scheme.
Automakers lost ground with their production hit hard by the outbreak. Nissan dropped 5.16 per cent to ¥380.4 with Toyota down 2.90 per cent at ¥6,718. ― AFP