TOKYO: Tokyo shares were 0.70 percent higher in volatile early trade Wednesday after China’s central bank slashed interest rates for the fifth time in nine months to shore up the world’s second-largest economy.
The Nikkei-225 index at the Tokyo Stock Exchange opened higher but dipped in and out of negative territory after the opening. It was up 125.11 points to 17,931.81 at around 9:40 am (0040 GMT).
“The market environment, with the Dow’s fall and currency rates, is putting more downward pressure on Tokyo shares,” said Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking Corp.
“Investors are monitoring the Shanghai opening” at 10:30 am (0130 GMT).
US equity markets saw an early surge Tuesday and stayed in the black for much of the day, but faded sharply before the close as jitters sparked by concerns over the health of the Chinese economy returned to the market.
Stocks in China have fallen sharply over fears that the world’s second-biggest economy, a key driver of global growth, is weaker than thought.
Shanghai shares plunged 7.6 percent Tuesday, extending their worst four-day rout in almost two decades as investors feared the heady share prices on China’s main exchange were unjustified amid the slowdown.
Hoping the stem the losses, China’s central bank announced after Tuesday’s close that it would cut interest rates by 0.25 percentage points.
