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Tokyo tumbles 607 points
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September 22, 1999: 7:54 a.m. ET
Nikkei suffers largest fall this year as yen strength erodes exports
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LONDON (CNNfn) - Tokyo suffered its largest point collapse of the year Wednesday as a rising yen and a slide on Wall Street soured sentiment throughout Asia.
Hong Kong and Singapore also fell back as the Japanese currency resumed its upward momentum. This followed Tuesday's decision by the Bank of Japan not to loosen its monetary policy, despite warnings from politicians and exporters that yen strength threatened economic recovery.
In Tokyo, the benchmark Nikkei 225 slid 3.4 percent in early trade as export-sensitive stocks suffered a sharp sell-off, and the weak U.S. performance dented sentiment. The Bank of Japan announcement came after Tuesday's market close in Tokyo.
The Nikkei hit a session low of 17,250 and ended the morning at 17,369 before dipping again to end the Wednesday trading down 607 points or 3.39 percent at 17,325.76, its biggest fall this year.
In Hong Kong, the Hang Seng index firmed a little at midday but the absence of any pick-up in Tokyo caused it to fall further, eventually closing 232.8 points or 1.73 percent lower at 13,187.62.
Singapore's Straits Times index was hit even harder, closing down almost 2 percent at 2,067.66.
In Seoul, the Kospi index gave up most of Tuesday's sharp gains, closing down 15.9 points or 1.66 percent at 941.57 as blue chips slumped after a series of program trades.
Taiwan's markets remained closed as the island was rocked by more aftershocks in the wake of Tuesday's earthquake.
The Japanese central bank's controversial move pushed the yen/dollar rate to 103.83 in New York Tuesday, from 107 before its announcement. The dollar firmed a little in Asian trade to around 104.50 yen ahead of this weekend's G-7 economic summit.
News Tuesday of a record U.S. trade deficit sent the Dow Jones industrial average into a 2.1 percent tail-spin. The Nasdaq Composite and S&P 500 also lost more than 2 percent.
With Wall Street's downbeat mood ringing in their ears, traders in Tokyo sent shares down across the board, with exporters suffering most.
Auto stocks suffered badly, with Honda losing 7.4 percent and Toyota off 6.3 percent, with Nissan the best performer with a loss of only 4 percent.
Electronics manufacturer Fujitsu closed down 6.7 percent and NEC Corp. slid 6.25 percent. Sony, a strong performer in recent sessions, lost 3.8 percent.
Banks also weakened, with Sumitomo the worst affected, down 7.3 percent, while Sanwa closed the session with a 6.4 percent decline.
Traders in Hong Kong were downbeat about the impact of the yen and the U.S. trade deficit, leading some to point to a break back towards the 13,000 level.
Market bellwether HSBC Holding ended 1.6 percent down to set the tone for widespread losses among blue chips. Cable & Wireless Hong Kong shed 3.3 percent and Swire Pacific dipped 3.1 percent.
Property stocks also suffered, with Sino Land losing 1.8 percent despite posting a 60 percent rise in first-half profits and New World Development closed down 2.4 percent.
In other corporate news, China Telecom (Hong Kong) lost 3.7 percent amid speculation it would announce a share placement.
Tech stocks also felt the heat as Pacific Century CyberWorks, the market's largest Internet play, fell 2 percent.
Singapore also suffered from weakness in a technology sector which had hitherto been the strongest performer this year. Datacraft, a contract computer manufacturer, lost 1.8 percent and OCBC was off 1.6 percent.
Market heavyweights also suffered, with Singapore Airlines slumping 5.5 percent after hitting record highs in the previous three sessions. Singapore Press Holdings, the media group, fell 4.5 percent after climbing strongly in recent sessions.
Electronics manufacturers bucked the trend as their demand outlook firmed in the wake of the Taiwan earthquake which is likely to slash that country's semiconductor output. Elec & Eltek added 1.1 percent.
Property group Wing Tai Holdings was the best performer on the index, jumping 2.8 percent after predicting a return to profit next year.
Smaller markets also suffered, though the impact varied widely. The All Ordinaries index in Sydney narrowed early losses to close down just 0.8 points at 2,898.0 as financial and gold stocks firmed in afternoon trade.
Thailand's Set index was worst affected, closing down 3.6 percent at 410.26. Traders reported concern about falling overseas capital inflows.
The KLSE Composite in Kuala Lumpur fell 2.45 percent to close at 721.17, reversing Tuesday's gains after more capital controls were lifted.
The PHS Composite in Manila ended a three-session winning streak to end down 0.9 percent at 2,107.73 while the JSX index in Jakarta closed at 545.45, a loss of 0.33 percent..
-- from staff and wire reports
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