TOKYO: Tokyo stocks dropped again Wednesday to their lowest level since late 2014, as fears of a global recession hammered investor confidence ahead of testimony by the head of the US central bank.
The plunge came the day after the benchmark Nikkei index posted a 5.4-percent drop, its steepest one-day decline in percentage terms since June 2013.
On Wednesday, the Nikkei slipped 2.31 percent, or 372.05 points, lower at 15,713.39, the lowest since October 2014 and putting it deeper into bear territory — a 20 percent fall from recent highs.
The Nikkei — which fell more than four percent at one stage on Wednesday — was last around this level before the Bank of Japan expanded its enormous asset-buying scheme, kicking off a big rally.
The broader Topix index of all first-section shares fell 3.02 percent, or 39.37 points, to 1,264.96.
“Japanese stocks are suffering… and it’s difficult to bounce back,” Tomoichiro Kubota, a senior analyst at Matsui Securities, told Bloomberg News.
“We have worries over financial institutions in Europe, problems in the bond market, and concerns aren’t alleviated at all.
“There’s still a sense of wariness toward commodity-related corporate earnings in the US, so that’s a negative, plus the yen is being favoured as a place of refuge.”
With volatility coming back to stock markets around the world, analysts said attention will now turn to a congressional testimony by Federal Reserve boss Janet Yellen later Wednesday.
Investors will parse her comments for clues about the bank’s monetary policy plans — following December’s interest rate hike — as crude prices sit at 12-year lows and the global economy struggles.
