Tokyo stocks hit 19-year lows
The benchmark 225-issue Nikkei Stock Average fell 26.25 points, or 0.31%, to end at 8,438.52 points. It was the Nikkei’s lowest close since April 8, 1983, when it closed at 8,435.37 points. On Tuesday, the Nikkei rose 4.40 points, or 0.05%, to 8,464.77.
The dollar bought 119.69 yen at 5pm (3am EST) yesterday, up 0.06 yen from late Tuesday and just above its overnight trading level of 119.64 yen in New York. The greenback traded in a range between 119.56 yen and 119.85 yen in Tokyo.
Yesterday, Tokyo shares opened higher on Wall Street’s overnight gains.
They also got a boost from the government’s announcement that Japan’s gross domestic product grew a stronger than expected 0.7% in the July-September quarter.
But shares quickly retreated after economy minister Heizo Takenaka warned that the pace of growth had slowed and that demand for Japanese exports was uncertain.
Japan’s economy has been stagnant for over a decade, despite aggressive fiscal stimulus spending and interest rates near zero. And investors were banking on it to take another turn for the worse.
“Today’s economic growth figures were backward looking, and although it was slightly better than consensus, other data is already showing a slowing in the economy and possibly another contraction as early as the first quarter of next year,” said Masaaki Kanno, an economist with JP Morgan in Tokyo.
He said the Tokyo market would be in a downward trend for the foreseeable future.
