The Topix dropped 3.7 percent to 1,384.97 as of 12:41 p.m.in Tokyo, with about 30 shares falling for each that rose. Investors drew a few relief as mining and trading giant Glencore recovered 16.9% overnight having fallen to a record low at the start of the week on concern over the company’s ability to withstand a prolonged decline in metals prices.
Advertisement
The Nikkei and corporate profits had surged in tandem since last October, when the BOJ first announced its stimulus program which was unprecedented in size (Yen 80 trillion per month) in conjunction with the Abernomics which was looking to a weaker yen to keep Japan\’s exports competitive.
Emerging-market currencies also fell, with Malaysia’s ringgit and Indonesia’s rupiah hitting fresh 17-year lows, amid fresh pressure on commodities.
Demand for the safe-haven yen eased in early Tokyo trade as global stocks steadied and a few semblance of calm returned to markets, but traders said month-end and quarter-end flows meant that volatility was likely to remain a feature. Kobe Steel Ltd. sank the most on the Nikkei 225 Stock Average after cutting its annual profit forecast by more than half amid slowing sales in China.
The major European markets moved lower on Tuesday. On Tuesday, the Nikkei had ended down 4.05 percent amid fears of a China-led global economic slowdown. Singapore’s dollar fell to its weakest in six years, as analysts said the city-state’s economy could be on the brink of a recession. Australia’s dollar was down as much as 0.78% against the US dollar.
Investors will also pay attention to a speech by USA central bank chief Janet Yellen later in the day for cues on the direction of USA monetary policy, her first since indicating last week that a hike in the near-zero federal funds rate remains on the table for 2015.
In China, the Ministry of Finance on Tuesday approved another batch of infrastructure projects worth 650 billion yuan ($102.1 billion) to stimulate economy, but analysts says market confidence needs time to recover.
After the initial buying ran its course, the market’s upside was limited until the middle of afternoon trading.
Advertisement
Taiwan’s market was closed because of Typhoon Dujuan. That market was catching up with the region’s losses Monday, when it was closed for holiday. The original incorrectly stated Monday in the fifth paragraph.
