Posted on 08/08/2011 2:10:17 AM PDT by NoLibZone
TOKYO: Tokyo stocks lost 2.18 percent on Monday to end at the lowest point in nearly five months despite a G7 pledge to help stabilise markets in the wake of the first-ever cut in the US credit rating.
The benchmark Nikkei-225 index of the Tokyo Stock Exchange fell 202.32 points to 9,097.56, the lowest finish since March 17, when Japan had just been hit by its huge quake, tsunami and nuclear disasters.
The Topix index of all first-section issues sank 2.26 percent or 18.10 points to 782.86.
The Nikkei opened down 1.40 percent after the G7 economic powers -- Britain, Canada, France, Germany, Japan, Italy and the United States -- said in a joint statement that they would "take all necessary measures to promote stability".
The G7 move followed the first ever downgrading of the US credit rating by a major agency, which spawned fears of more market turmoil.
Losses in Tokyo stocks widened in the afternoon, dragged down by heavy selloffs in other Asian bourses such as in China and South Korea.
Still, "Japan stocks are outperforming" other Asian markets, said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
The market was propped up by the Bank of Japan buying funds linked to stock indexes under its asset purchase programme to help ensure recovery from the March disaster, Fujito told Dow Jones Newswires.
The buying "likely came first thing in the morning as a preemptive measure to stem what otherwise would have been a dramatic market response to the S&P downgrade," he said.
Fujito also noted that the government's willingness to intervene in the currency exchange market if and when needed, following its yen-selling last week, was also supporting the floor for the Nikkei.
But he said the index may fall further this week, especially if US stocks sustain heavy losses later in the day.
It is too soon to brush off the potentially enormous impact of the downgrade but it was unlikely that the Nikkei would fall below the low after the March disaster, said Yumi Nishimura, senior market analyst at Daiwa Securities.
"Even in the worst-case scenario, it's hard to imagine that the Nikkei will dip below its post-quake low (of 8,227.63)" hit on March 15, she said.
Bush’s fault
No, no, no - you didn’t get the memo. It’s the Tea Party’s fault.
Yup, that's the mantra of the week. That's all we're going to hear.
That Americans continue to buy his crap is what will continue to ail our nation. We will be toast until Americans wise up
Republicans better get on-message that the lack of deficit control is one of the main problems S&P cited in their Rationale section of the downgrade announcement document. Entitlements in particular.
Would anybody say that would not have a negative effect on the markets?
Or, how about a show of seriousness by anyone,
INCLUDING THE TEA PARTY CANDIDATES we elected last November!
BONER needs to fire up the Buses Too!
Worthless POS!
THERE IS NO BETTER WAY TO COUNTER THE LEFTIST'S ATTACKS!
I agree with all you said.
I hope my thinking is wrong but once again I think they’re hoping Rush Limbaugh and AM Radio’s going to carry the message and water FOR them.
News on the radio this morning was that S&P was to blame. Reported straight up, with no explanation, commentary or opposing viewpoint.
Like I said, this is all about confidence.
If people blame S&P it looks like sour grapes and if S&P admitted a mistake then people would think that the USA put undo pressure on S&P to get them to change their rating.
Either way the damage is done.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.