Tokyo stocks sink deeper amid global recession fears

Jiji Press

11:13 JST, December 17, 2022

TOKYO (Jiji Press) — Tokyo stocks plunged deeper on Friday, as fears over a global recession grew.

The Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section lost 524.58 points, or 1.87%, to finish at 27,527.12, after dropping 104.51 points Thursday.

The broader TOPIX index fell 23.69 points, or 1.20%, to 1,950.21, following a 3.52-point fall the previous day.

Stocks nosedived right after the opening bell in the wake of a Wall Street sell-off Thursday.

On top of the U.S. Federal Reserve announcing another interest rate increase and signaling a prolonged credit tightening on Wednesday, “surprisingly weak U.S. economic indicators released the following day fueled concerns over the possibility of the world’s biggest economy falling into a recession,” Maki Sawada, strategist at Nomura Securities Co., pointed out.

Interest rate hikes by the European Central Bank and the Bank of England on Thursday also added to global slowdown worries, market sources said.

The two European central banks, as well as the Fed, carried out smaller rate hikes than their preceding ones. “But yet they will be sticking to their hawkish stances,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

Semiconductor-related and other technology-oriented names, in particular, bled severely as did their U.S. peers the previous day, brokers said.

Stocks extended losses for most of the rest of the session.