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Abu Dhabi, UAEWednesday 16 January 2019

Japan's Nikkei on track for worst quarter since 2008

Stock market index has fallen to new 15-month low on US worry

Nikkei share lost 1.8 per cent on Friday morning after shedding a hefty 2.8 per cent yesterday. EPA
Nikkei share lost 1.8 per cent on Friday morning after shedding a hefty 2.8 per cent yesterday. EPA

Japanese shares suffered more losses on Friday, with major indexes sinking to fresh multi-month lows, as the threat of further hikes in US borrowing costs raised concerns about the global economic outlook.

The Japanese benchmark Nikkei share average lost 1.8 per cent after shedding a hefty 2.8 per cent on Thursday. Nikkei, which is a stock market index for the Tokyo Stock Exchange, is heading for its worst quarter since 2008, with a loss of 17 per cent so far.

The broader Topix, which is used as a benchmark for investment in Japan stocks, ended the Friday morning session with a dip of almost 2.4 per cent. It has shed 22.5 per cent from its January peak and is sinking deeper into a bear market.

“Global investors have completely capitulated,” said Yasuo Sakuma, chief investment officer at Libra Investments, referring to dashed hopes for more dovish comments from the US Federal Reserve chairman Jerome Powell.

“I wouldn't be surprised if the Nikkei falls below the 20,000-mark. Investors are getting increasingly suspicious about the valuation. No one wants to buy now until they get some idea of how bad the situation could get,” stated Mr Sakuma.

Libra Investments offer market insights and long term investment judgement.

Japanese auto giant Nissan’s shares fell 1.8 per cent on Friday, but fared better than the broader market after news Japanese prosecutors re-arrested its ousted chairman Carlos Ghosn on fresh allegations of aggravated breach of trust.

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Read more:

Shares of Nissan and Mitsubishi plunge following Ghosn arrest

Tech stocks rout contributes to US equities plunge as treasuries gain

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Automaker Toyota dropped 3.1 per cent while Tokyo-headquartered Familymart Uny and Don Quijote fell 5.8 per cent and 3.2 per cent respectively.

Dollar/yen dropped to 110.815 overnight, to its weakest since early September. The currency pair – dollar/yen - shows how many Japanese yen are needed to purchase one US dollar.

Updated: December 21, 2018 10:22 AM

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