TOKYO: Tokyo stocks tumbled more than three percent in opening trade Thursday after falls on Wall Street and the dollar’s drop against the yen.
The benchmark Nikkei 225 index lost 3.12 percent, or 446.53 points, to 13,879.93 in the first few minutes of trading. The benchmark index was down 3.10 percent at 9:38 am (0038GMT).
The Dow Jones Industrial Average fell 0.69 percent to 15,302.80 on Wednesday due to concern over the global economy and the recent surges in US bond yields.
The rise in US yields was “taking the wind out of equity markets generally as fixed income investments begin to look more attractive”, said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Hirokazu Kabeya, senior strategist at Daiwa Securities, said “investors still remain shaken-up” after the recent volatile trade in Tokyo, including a single day loss of more than seven percent last week.
“They don’t see any indication of the downward trend coming to a halt,” he said.
The stock market has soared since Prime Minister Shinzo Abe came to power with his pro-spending policies, but sentiment has been turned around, he said, adding investors were now sensitive to any negative news.
“Selling is gaining momentum even though there are some investors willing to pick up bargains. The market is now vulnerable to even a small shock.”
The stock market losses also came after the Organization for Economic Cooperation and Development (OECD) on Wednesday trimmed its world economic growth forecast for 2013 to 3.1 percent from 3.4 percent.
The OECD also slashed its growth forecast for the world’s most advanced economies, except Japan, but said growth should pick up later this year.
The dollar fetched to 100.80 yen in early Asian trade Thursday against 101.13 yen in New York late Wednesday.
The euro bought $1.2944 and 130.65 yen against $1.2942 and 130.87 yen in US trade.