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Banks (Finance)

Japan's Nikkei Stock Average Falls 2.05% Amid US Federal Reserve Rate Hike Surprise

Strategic Insights

— 1 min read

Market anxiety increased ahead of global markets' reaction to the Federal Reserve's move, with investors awaiting the reopening of Shanghai and Shenzhen markets on Monday to assess the impact of Beijing's monetary tightening. The U.S. Federal Reserve's decision to raise the interest rate charged on emergency loans to banks from 0.5 percent to 0.75 percent has sent the dollar to a one-month high, erasing early gains made by exporters.

Key Takeaways:

  • The Nikkei Stock Average fell 2.05 percent on Friday, with resource-related issues slumping due to the U.S. Federal Reserve's rate hike announcement.
  • The broader Topix index dropped 15.65 points, or 1.73 percent, to 889.08, with investors remaining anxious for the Shanghai and Shenzhen markets to reopen on Monday.
  • Exporters' early gains were erased as investor anxiety increased ahead of global markets' reaction to the Fed's move, with oil and gold prices also suffering.
  • Resource-linked issues were hit hard, with Mitsubishi Corp. losing 1.7 percent to 2,212 yen and Mitsui & Co. falling 3.2 percent to 1,352 yen.
  • Property shares collectively retreated on Friday, with Mitsui Fudosan Co. Ltd. losing 4.32 percent to 1,461 yen and Mitsubishi Estate Co. Ltd. plunging 4.31 percent to 1,354 yen.
  • The real estate subindex shed 3.8 percent to become the biggest loser among all the subindexes on Friday.
  • Toyota Motor Corp. fell 1.8 percent to 3,300 yen, despite President Akio Toyoda's announcement of a "sincere explanation" about the company's safety recalls.

Statistics:

  • The Nikkei Stock Average fell 212.11 points to 10,123.58 on Friday.
  • The broader Topix index dropped 15.65 points, or 1.73 percent, to 889.08.
  • Oil prices fell more than a dollar to below 78 U.S. dollars a barrel.
  • Gold prices lost more than 1 percent.
  • 1.8 billion shares moved on the Tokyo exchange's First section, slightly down from Thursday's volume of around 1.7 billion shares.

Sources:

  • Xinhua via COMTEX - February 19, 2010
  • Copyright 2010 XINHUA NEWS AGENCY

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