Business News

TOKYO, (APP/AFP) – Tokyo stocks extended a
global sell-off Wednesday morning with banks tumbling as investors were left underwhelmed by a government stimulus package.
US and European markets fell Tuesday as worries about unsteady
European lenders, and fears about the difficulty they face making money in a low interest rate era, prompted a wave of selling.
After Tokyo’s markets closed Tuesday the government unveiled details
of a 28 trillion yen fiscal plan to kickstart the economy but the latest in several attempts over the years fell flat.
The programme includes 6.0 trillion yen in low-interest loans and
just 7.5 trillion yen in fresh spending — about a quarter of the total — by the national and local governments.
It came after the Bank of Japan disappointed markets with modest
tweaks to its own stimulus measures on Friday.
The announcement sent the dollar tumbling as low as 100.86 yen
Tuesday and in early Asian trade Wednesday it recovered slightly to 101.19 yen.
Hopes had been buidling through July that authorities would come up with a
strong plan to support growth after Britain’s shock vote on June 23 to leave
the European Union sent shudders through world markets.
“After all the build-up, it’s a disappointment,” Shane Oliver, a global
investment strategist at AMP Capital Investors, told Bloomberg News.
The announcement will be a minus for markets Wednesday, Oliver said,
“reflecting the negative response we’ve already seen in the US and Europe
overnight”.
By the break, the benchmark Nikkei 225 index was down 0.86 percent, or
141.48 points, at 16,249.97, extending a 1.47 percent drop Tuesday.
The broader Topix index of all first-section shares shed 1.39 percent, or
18.10 points, to 1,282.10.
Banking stocks tanked as lenders’ bottom lines come under pressure.
Mitsubishi UFJ Financial Group shed 3.45 percent to 494.6 yen, rival
Sumitomo Mitsui Financial Group dived 3.61 percent to 3,171 yen and Mizuho
Financial Group was 2.53 percent off at 161.6 yen.
Honda bucked the downtrend, soaring 3.71 percent to 2,862 yen after the car
maker on Tuesday reported an April-June net profit that beat market
expectations.
However, other exporters dropped on a stronger yen, which hurts their
profit outlook. Toyota fell 1.22 percent to 5,626 yen and factory robot maker Fanuc slipped 1.39 percent to 16,910 yen.