[TOKYO] Tokyo stocks ended sharply lower on Friday, joining a global equities rout after the European Central Bank's revised stimulus plan fell short of expectations.
Stock markets tumbled after policymakers decided not to expand the size of the bank's bond purchase programme as was hoped and lowered its deposit interest rate by less than expected.
ECB chief Mario Draghi said the bank would broaden the types of bonds it purchases and extend the end date of the bond purchase programme.
"The market was hoping for some Draghi magic, but instead got some Draghi shock," Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group, told Bloomberg News.
"I'd thought that for a recovery in the European economy we'd need some bold easing measures, but since Draghi seems to be taking the economic recovery lightly, it's possible that it could take a turn for the worse for some time." The benchmark Nikkei 225 index closed down 2.18 per cent, or 435.42 points, at 19,504.48, while the Topix index of all first-section shares dropped 1.80 per cent, or 28.92 points, to 1,574.02.
Thursday's announcement sent the euro surging more than three percent against the dollar and 2.6 per cent against the yen.
On Friday in Tokyo it held most of those gains, sitting at US$1.0924 and 134.01 yen, from US$1.0947 and 134.23 yen in New York.
The dollar rose to 122.67 yen from 122.61 yen on Thursday in New York, but still down from above 123 yen in Asian trade.
A stronger yen is a negative for Japanese exporters' competitiveness and overseas profitability.
Toyota dropped 1.72 per cent to 7,692 yen, mobile carrier SoftBank fell 2.98 per cent to 6,375 yen while Sony tumbled 2.39 per cent to 3,091 yen.
Uniqlo-operator Fast Retailing, a market heavyweight, dropped 3.09 per cent to 46,720 yen.
Toshiba fell 1.07 per cent to 302.3 yen as Japan's leading Nikkei business daily said the vast conglomerate was in talks with Fujitsu and Vaio to merge their personal computer businesses.
Investors are now looking for the outcome of a US jobs report on Friday although analysts say the result would have to be very poor to prevent the Federal Reserve from hiking interest rates at its policy meeting later this month.