Tokyo: Disappointment over the Bank of Japan’s decision not to expand its stimulus drive was likely to hang over the Japanese market next week, dealers said, as the benchmark Nikkei 225 index tumbled to its lowest level in six months on Friday.
Tokyo stocks took a pounding after a rout on Wall Street with the Nikkei tumbling 2.38 per cent to its worst close since October, and leading a broader decline in Asian markets.
The Nikkei shed 340.07 points to finish at 13,960.05, with the headline index losing a whopping 7.33 per cent since Monday. That was the Nikkei’s worst weekly performance since a 10 per cent decline in the period after Japan’s 2011 quake-tsunami disaster, according to Dow Jones Newswires.
The Topix index of all first-section shares lost 1.34 per cent, or 15.40 points, to end at 1,134.09. It fell 6.73 per cent over the week.
Since the start of the year, the Nikkei is down about 14 per cent after a world-beating 57 per cent return in 2013, its best annual run in over four decades.
Earlier this week, BoJ governor Haruhiko Kuroda dismissed any hopes for further monetary easing in the near future, saying the world’s number-three economy was getting back on track despite a sales tax rise that has exacerbated fears of a drop-off in consumer spending.
The comments sent the yen soaring, which tends to dent shares of Japanese exporters as it hurts their profitability.
“Those who expected more easing got disappointed,” said Yusuke Sakai, senior stock trader at T&D Asset Management.
Investrust CEO Hiroyuki Fukunaga said that with sign of further BoJ monetary easing, “there really is nothing on which to pin much stock market support — except on corporate earnings”.
Market heavyweight Fast Retailing plunged 7.87 per cent to 33,820 yen (Dh1,224) on Friday after the Uniqlo clothing chain operator cut its full-year earnings forecast blaming weaker demand at home.
“We are going to change everything about how we do our operations in Japan 180 degrees,” the company’s chief executive, Tadashi Yanai, told a news briefing in Japan on Thursday.
Anxiety about pricey technology stocks returned with a vengeance to Wall Street, sending the Nasdaq down 3.10 per cent to 4,054.11, its biggest single-day drop in percentage terms since November 2011.
The Dow sank 1.62 per cent and the S&P 500 fell 2.09 per cent.
The drop came just ahead of US earnings season, which will be a key trading cue for investors.
“The biggest concern is that US corporate earnings may not be as strong as hoped, making Wall Street look overvalued,” said Shinkin Asset Management fund manager Naoki Fujiwara.
Tech-linked Japanese shares took a hit with mobile giant SoftBank tumbling 3.81 per cent to 6,900 yen and chip giant Tokyo Electron dropping 4.54 per cent to 5,876 yen.
Consumer electronics giant Sharp fell 1.32 per cent to finish at 299 yen.
In Tokyo forex trade, the dollar bought 101.80 yen, up from 101.44 yen in New York but flat against 101.81 yen in Tokyo earlier on Thursday.
