AFP, Tokyo :
Tokyo stocks slumped more than three percent Wednesday, extending a drop on global markets as a stronger yen hit exporters and falling oil prices reignited worries about the world economy.
As the euphoria of Friday’s Bank of Japan stimulus faded, oil’s fresh collapse below $30 a barrel hammered energy shares and investor confidence.
“Since the BoJ cut (decision) last week, markets have been on edge, concerned that the global situation is considerably worse than initially envisaged and that global central banks will be unable to combat deflationary risks driven by plummeting oil prices,” said Mark Smith, a senior economist at ANZ Bank New Zealand, according to Bloomberg News.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange tumbled 3.15 percent, or 559.43 points, to close at 17,191.25. The Topix index of all first-section shares also dived 3.15 percent, or 45.77 points, to 1,406.27.
Financial markets in Europe and on Wall Street took a hammering on Tuesday, continuing one of the worst starts to a year in recent history, as China’s bumpy economic slowdown and weak global growth also deflated investor spirits.
The uncertainty fuelled yen buying as traders sought out a currency seen as a safe bet in times of turmoil.
But the yen’s rise hurts Japanese exporters’ shares as it shrinks the value of their repatriated overseas earnings.
In Tokyo the dollar fetched 119.58 yen, down from 120.01 yen Tuesday in New York and 120.96 yen on Monday.
Toyota shares sank 5.53 percent to 6,900 yen, rival Nissan tumbled 4.82 percent to 1,124 yen, Sony dropped 2.56 percent to 2,623.5 yen, and banking giant Mitsubishi UFJ fell 4.59 percent to 551.8 yen.
Telecom giant SoftBank was down 4.87 percent to 4,996 yen, and Uniqlo operator Fast Retailing, a market heavyweight, was also down, losing 1.66 percent to 36,620 yen.
Energy and commodity shares also fell, with oil explorer Inpex sinking 1.55 percent to 984.9 yen and steelmaker JFE Holdings diving 7.41 percent to 1,411.5 yen.
