TOKYO: Japanese stocks suffered their biggest one-day drop in more than two months, adding momentum to a global selloff after the European Central Bank announced a smaller-than-expected burst of monetary stimulus.
Japan’s Nikkei 225 Stock Average NIK, -2.18% closed down 2.2%, the biggest one-day loss since Sept. 29. Shares fell 1.9% for the week, snapping a six-week string of gains.
While the ECB’s measures, announced Thursday, included a further cut in its deposit rate and an extended bond-buying program, the moves were less aggressive than many investors expected. See the recap of Draghi’s news conference
The ECB’s measures were a “huge disappointment” from ECB President Mario Draghi, said Kay Van-Petersen, Asia macro strategist at Saxo Capital Markets in Singapore.
Elsewhere, Australia’s S&P/ASX 200 XJO, -1.46% fell 1.5%, South Korea’s Kospi SEU, -0.99% slipped 1% and Hong Kong’s Hang Seng Index HSI, -0.81% fell 0.8%.
The Shanghai Composite Index SHCOMP, -1.67% fell 1.7% as investors freed up cash in anticipation of 10 public listings, announced Thursday. Chinese officials said last month they would relaunch initial public offerings after a suspension in July, during the heat of the summer stock selloff.
The global selloff began after the ECB cut interest rates by 10 basis points to negative 0.3% and extended its quantitative easing program by six months to March 2017. Read: Here’s why investors booed European Central Bank’s stimulus plans
Momentum from U.S. and Europe—with the Dow Jones Industrial Average DJIA, -1.42% shedding 1.4% and the Stoxx Europe 600 SXXP, -0.41% falling 3.1% Thursday—snowballed in Asia on Friday, with the steepest losses in Japan.
A strengthening yen USDJPY, +0.16% hurt Japanese exporters, which face diminishing value for repatriated earnings as the currency strengthens.
Toyota Motor Corp. 7203, -1.72% fell 1.7%, and Mitsubishi Motors Corp. 7211, -2.84% and Suzuki Motor Corp. 7269, -2.84% both lost 2.8%. Fast Retailing Co. 9983, -3.09% owner of the Uniqlo apparel chain, fell 3.1%.
The yen stabilized during the afternoon trading session in Asia at ¥122.68 against the dollar after trading as strong as ¥122.482 earlier Friday.
