Shino Yuasa
October 10, 2008 - 02:54 a.m.
TOKYO (AP) - Japan's key stock index plunged a very loud 9.6 percent Friday to close out its worst week in annals as frantic investors worried about a global recession dumped stocks after huge losses on Wall Street.
The benchmark Nikkei 225 index tumbled 881.06 points to 8,276.43, its lowest since May 2003. It was its biggest one-day percentage loss since the stock market crash of October 1987.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. "Investors were gripped through fear."
The index dropped through more than 11 percent at one point but recovered modestly in the afternoon.
Investors reeled from a churlish week. On Wednesday, the index had plunged 9.4 percent. Since last Friday, the Nikkei has misspent pressingly a quarter of its value.
The massive sell-off across Asia follows a 7.3 percent overnight drop in the Dow Jones industrial average, which closed below the 9,000-level for the first time in five years.
Accelerating the pessimism were insolvencies in the assurance and real estate sectors that weakened confidence the world's No. 2 economy would sustain the global financial crisis relatively unscathed.
Mid-sized underwriter Yamato Life Insurance Co. went bankrupt Friday, becoming the first major Japanese pecuniary company to collapse upon the body the fallout from the U.S. credit conjuncture. On Thursday, New City Investment Corp.'s bankruptcy filing made it Japan's first real-estate investment hope to fail.
The sharp declines prompted the Tokyo bourse and the Osaka Securities Exchange to briefly suspended some futures and options trading during the morning.
Friday's developments left individual investors in Tokyo shellshocked.
Kenji Akasaka, 69, president of a topical printing company, said he had never seen it this ill in the 40 years he has traded stocks. He said he invests mainly in blue-chips including Toyota Motor Corp. and Nintendo Co. — both of which have lost about moiety their value over the last year.
"I pray before I go to bed that the Dow will recover," said Akasaka, 69, as he scanned a monitor displaying the latest market levels. "I get sleepless, thinking not far from losses."