Nervous investors send stocks tumbling again on the Nikkei

City A.M. Reporter
THE BEARISH turn in stock markets seen at the end of last week continued in Japan yesterday, with the Nikkei losing 3.2 per cent.

Worries that the US Federal Reserve will roll back its stimulus this summer helped trigger last week’s sharp selloff.

Weak factor activity data from China, Japan’s second-biggest export market, also weighed on stocks, especially in Asia.

The Nikkei ended down 469.80 points at 14,142.65 yesterday, after trading as low as 14,027.42.

Yasuo Sakuma, portfolio manager at Bayview Asset Management, said he expected the Nikkei to correct to as low as 13,000, eight per cent below yesterday’s close.

Despite the turbulence, the Nikkei has risen 36 per cent this year.

It is still up 14.5 per cent since 4 April, when the Bank of Japan announced a sweeping monetary expansion campaign. The central bank has been encouraged to introduce ultra-loose policies by the country’s Prime Minister Shinzo Abe.

“The next major catalysts may come after the July Upper House elections, when we could see a string of evidence confirming that the economy and profits are on a solid recovery path, starting with the quarter two GDP release,” Goldman Sachs said yesterday in a note.