Tokyo: Stocks plunge 3% in morning trade

TOKYO stocks fell more than three per cent on Thursday morning, weighed by a surge in the yen after the Bank of Japan hiked interest rates and the Federal Reserve flagged a possible cut in its own rates later in the year.

The benchmark Nikkei 225 index sank 3.22 per cent, or 1,259.00 points, to 37,842.82, while the broader Topix index lost 3.53 per cent, or 98.67 points, to 2,695.59.

The Japanese market “is expected to start with losses due to the stronger yen, with traders nervously watching the dollar-yen exchange rate”, senior market analyst Toshiyuki Kanayama of brokerage Monex said.

Traders are also awaiting Toyota’s earnings report due later in the day, he added.

The dollar fetched 149.56 yen, down from 149.88 yen in New York late Wednesday after the US Federal Reserve signalled it could cut interest rates as soon as September. The dollar-yen rate was 153.09 yen on Tuesday.

Also on Wednesday, the Bank of Japan further unwound its massive monetary easing programme by raising interest rates for just the second time in 17 years. AFP