Japanese market plunges on Wall Street losses, stronger yen

The Japanese stock market closed sharply lower on Friday, with the key indexes falling to their lowest levels since mid March, ahead of the U.S. non-farm payroll report for August scheduled for release later in the day.

Wall Street's sharp decline overnight and a stronger yen encouraged market players to sell a wide range of stocks. The key Nikkei index briefly fell more than 3% to 12,163.33 in the morning, but bargain hunting among trading houses helped the market to recoup some of the losses. The benchmark Nikkei 225 Index closed down 345.43 points or 2.75% at 12,212.23, extending Thursday's losses. The key index has lost 6.6% over the week. The broader Topix Index of all First Section Issues lost 30.81 points or 2.56% to finish at 1,170.84. In the currency market, the U.S. dollar held steady in the upper 106-yen level in late afternoon trades in Tokyo, down 1.49 yen from Thursday's close of 108.33-108.36 yen. On Wednesday, the Dow and the broader S&P 500 indexes tumbled 3.0% each and the tech-heavy Nasdaq plunged 3.2% after a government report showed that jobless claims rose more than analysts expected for the week ended August 30 and retailers reported sluggish same store sales for the month of August. Oil prices fell for a sixth day on Thursday, closing at their lowest level in five months, as a lower-than-expected drop in U.S. stockpiles raised concerns about slowing demand for oil. In the Asian session Friday, oil was down 46 cents at $107.43 a barrel by 2:23 a.m. ET. On the economic front, the Ministry of Finance said that Japanese capital investment spending, or capex, was down an annual 6.5% in the second quarter of 2008. This marked the fifth consecutive quarter of decline. Capex was down an annual 4.9% in the first quarter of the year. The ministry also said that Japan's foreign reserves fell for the first time in three months in August. The country's foreign reserves in August stood at 997 billion yen, down 7.92 billion yen from 1.00 trillion yen in the previous month. In the financial sector, Mitsubishi UFJ Financial Group dropped 2.3%, Mizuho Financial Group slumped 6.4% and Sumitomo Mitsui Financial Group plunged 4.7%. Top brokerage Nomura Holdings fell 3.1% and Daiwa Securities Group lost 3.3%. Exporters fell on the back of a stronger yen. Automaker Honda Motor declined 1.1%, Toyota Motor fell 2.5%, office equipment maker Canon lost 2.9%, and machinery maker Komatsu plummeted 4.4%. Electronics giant Sony plummeted 4.2% after the company announced a voluntary recall of 438,000 Vaio portable computers citing a potential hazard that could cause them to overheat. In the tech space, Advantest slid 2.5%, Kyocera declined 2.6%, Fanuc lost 2.8% and Matsushita Electrical Industrial shed 3.1%. Inpex Holdings pared early losses to finish 2.1% higher, while Nippon Oil shed 1.0% and Nippon Mining Holdings plunged 3.3%. Trading house Mitsubishi Corp closed flat, Mitsui & Co slipped 0.2%, and Itochu gave away 1.7%. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved