TOKYO: Tokyo stocks ended Friday morning sharply lower, extending a global equities rout after the European Central Bank’s revised stimulus plan fell short of expectations.
Wall Street fell on Thursday, following European markets downward after the ECB decided not to expand the size of its bond purchase programme as hoped and lowered its deposit interest rate by less than expected.
ECB chief Mario Draghi said the bank would broaden the types of bonds it purchases and extend the end date of the bond purchase programme.
“The market was hoping for some Draghi magic, but instead got some Draghi shock,” Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group, told Bloomberg News.
“I’d thought that for a recovery in the European economy we’d need some bold easing measures, but since Draghi seems to be taking the economic recovery lightly, it’s possible that it could take a turn for the worse for some time.”
At the break Friday, Tokyo’s benchmark Nikkei 225 index had fallen 1.92 percent, or 383.40 points, to 19,556.50, while the Topix index of all first-section shares dropped 1.73 percent, or 27.72 points, to 1,575.22.
Thursday’s announcement sent the euro surging more than three percent against the dollar and 2.6 percent against the yen.
And on Friday in Tokyo it held most of those gains, sitting at $1.0920 and 133.86 yen, from $1.0947 and 134.23 yen in New York.
The dollar slipped to 122.59 yen from 122.61 yen Thursday in New York and above 123 yen in Asian trade.
A stronger yen is a negative for Japanese exporters’ competitiveness and overseas profitability.
Toyota dropped 1.49 percent to 7,710 yen by the break, mobile carrier SoftBank fell 2.57 percent to 6,402 yen while Sony tumbled 2.68 percent to 3,082 yen.
Uniqlo-operator Fast Retailing, a market heavyweight, dropped 2.34 percent to 47,080 yen.
Toshiba slipped 0.75 percent to 303.3 yen as Japan’s leading Nikkei business daily said the vast conglomerate was in talks with Fujitsu and Vaio to merge their personal computer businesses.
Investors are now looking for the outcome of a US jobs report on Friday although analysts say the result would have to be very poor to prevent the Federal Reserve from hiking interest rates at its policy meeting later this month.
