Japan’s shares plunged on February 12, following global markets, after a stronger yen against the dollar hurt the country’s big exporters.
Nikkei 225 fell as much as 5.4% in early trade. By the close, the benchmark index had recovered slightly, but was still down 4.85% to 14,952.61 points.
That was below the psychologically important level of 15,000 points and its lowest close since October 2014.
Today’s losses end what has been a turbulent week of trade for Japan.
The index has shed more than 11% over the trading week, which was short because of a public holiday on February 11.
Japan’s big exporters were hurt on February 12 as the dollar fell to a 15-month low against the yen. A stronger yen against the dollar hurts Japan’s exporters, as it makes their products more expensive to purchase overseas.
Auto maker Toyota finished Japan’s trading day down 7%, while Honda lost 5.5% and Nissan shed 5.8%.
Overnight, benchmark indexes in London, the US and Europe posted sharp declines amid continued worries about oil prices and over the strength of the global economy – particularly the outlook for the world’s largest economy, the US.
US Federal Reserve chair Janet Yellen’s gloomy economic assessment on February 10 was continuing to hurt investor sentiment around the world, analysts said.
Janet Yellen said financial conditions in the US had become “less supportive” of growth, dousing hopes of a second rise in interest rates in the near future.
Japan’s stock market fell on September 18 as the yen strengthened against the dollar in the wake of the Federal Reserve’s decision not to raise interest rates.
The Nikkei 225 index closed down 2% at 18,070.21. The dollar fell against the yen following the Fed’s decision to keep its interest rates unchanged, which hit shares in Japanese exporters.
Shares in Toyota and Honda dropped 1.4%, while Panasonic was 2.1% lower.
A stronger yen against the dollar affects exporters, as it makes their goods more expensive to sell overseas.
The Fed’s decision to hold interest rates also renewed concerns about the strength of the global economy.
The US central bank said worries over the global economy, particularly China, had influenced its decision not to raise rates.
US shares saw choppy trade after the decision, with both the Dow Jones and S&P 500 closing lower.
Chinese shares were mixed after government data showed that property prices had shown some signs of recovery.
New home prices rose for a fourth consecutive month in August, up 0.3% from the previous month, but were down 2.3% from a year ago.
The property sector accounts for 15% of China’s economic growth, so even minimal gains have a positive impact on the world’s second largest economy.
The Shanghai Composite index ended 0.4% higher at 3,097.92, while Hong Kong’s Hang Seng index closed up 0.3% at 21,920.83.
In Australia, the S&P/ASX 200 index erased earlier losses to end up 0.6% at 5,178.50.
South Korea’s benchmark Kospi index finished 1% higher at 1,995.95.