the nikkei tanking tonight....doesnt look good for 9984 tonight.
TOKYO (CBS.MW) -- The muscle-bound yen pummeled Tokyo stocks, sending the benchmark Nikkei Average for its biggest decline of the year Thursday morning. Meanwhile, every other Asia-Pacific market also fell on worries about Japan's recovery and about higher interest rates after the bullish U.S. consumer price report.
The Nikkei 225 Average plunged more than 600 points at one stage, and closed the Thursday morning session down 589.98, or 3.3 percent, at 17,187.24. That level marks a five-week low and the first time in two weeks the benchmark gauge has fallen below the 17,500 level.
Typhoon York prevented trading at Hong Kong's stock and futures exchanges, although the market could open if the storm abates, officials said. Seoul and Jakarta stock indexes were down more than 1.7 percent, while Australia lost 0.9 percent to 2911.
The dollar was trading at 104.80-85 yen, recovering from a deep overnight low of 103.25 yen, its lowest since January 1996.
Currency traders are anticipating a possible third intervention in the foreign exchange market since Friday from the Bank of Japan. They cited dollar short-covering as the reason for the greenback's coming off a 44-month low.
Prime Minister Keizo Obuchi warned the yen's rapid rise could hamper Japan's nascent economic recovery. Obuchi said "appropriate stabilizing measures" will be taken to curb the robust yen, Japan's Kyodo news agency reported.
The Yomiuri Shimbun, Japan's largest circulation daily, reported Thursday that the BOJ and Finance Ministry have begun consulting with their U.S. and European counterparts on coordinated exchange-rate intervention.
Share prices in Sony Corp., NEC Corp.and other blue-chip Japanese multinationals fell sharply. Yen appreciation reduces the value of income companies earn overseas in dollars or other foreign currencies.
Sony (SNE: news, msgs) stumbled 360 yen to 15,590 as the yen outweighed the excitement of analysts' upgrades and the company's recently announced March launch of the PlayStation2 video-game console.
NEC (NIPNY: news, msgs) lost 110 yen to 2125. Japan's biggest PC maker expects to post a 50 billion yen ($476 million) group net loss for the fiscal first half through September 30, marking the second straight group interim loss, the Nihon Keizai business daily reported Wednesday. (Tokyo markets were closed Wednesday for a national holiday.)
Advantest Corp., a semiconductor testing-device maker popular with foreign fund managers, crumbled 890 yen, or 5.9 percent, to 15,910. Matsushita Communications swooned 860 yen to 11,440.
Toyota Motor (TOYOY: news, msgs) fell 70 yen to 3440, while Honda (HMC: news, msgs) skidded 260 yen to 4280 and Nissan (NSANY: news, msgs) sagged 26 yen to 669.
A big winner: Secom Co. surged 1810 yen, or 8.9 percent, to 22,010. The major Japanese security service company said Tuesday it'll execute a 2-for-1 stock split Nov. 19. Registered stockholders as of the close of trading Sept. 30 will be affected by the split, which will double the number of the company's total outstanding equity to 232.81 million shares.
World markets Wednesday
A benign inflation report from the government did little to jump-start Wall Street and Latin American stocks, providing little incentive to players weary of searching for lasting trends as they watch the action in the currency markets
The U.S. August consumer price index rose 0.3 percent -- in line with expectations -- and the core rate, when the volatile food and energy components are excluded, rose 0.1 percent which was slightly less than expected.
The CPI is one of the most important gauges for measuring price inflation and is watched closely by the Federal Reserve. The Fed's FOMC meets again to discuss interest rates on Oct. 5.
"The [CPI] data counters Tuesday's strong [U.S.] retail sales, increasing the likelihood the Fed will remain on hold on October 5," said Marian Bell, London-based head of research at the Royal Bank of Scotland.
Europe's bourses rode a rollercoaster Wednesday, seesawing throughout the day in the wake of events across the Atlantic to close lower.
In the currency markets, the yen rose to its highest level in over three years against the dollar on expectations that money will continue flowing into Japan.
U.S. markets Wednesday
The Dow Jones Industrial Average declined 108.91 points, or 1.0 percent, to 10,801.42. The barometer had risen as much as 103.53 points in the opening minutes of trade.
The Nasdaq Composite descended 54.13 points, or 1.9 percent, to 2,813.67. The Standard & Poor's 500 Index fell 1.4 percent. The Russell 2000 Index of small-capitalization stocks sank 0.4 percent. See U.S. Market Snapshot.
A well-behaved core consumer price index gave bond prices reason to cheer Wednesday. But hedge fund selling of long-term Treasurys, as well as persistent wariness over another Fed rate hike, took prices off their highs.
The 30-year bond added 5/32 to yield 6.115 percent. The 10-year, meanwhile, climbed 6/32 to yield 5.935 percent. The 5-year added 3/32 to yield 5.776 percent. The 2-year inched up 2/32 to yield 5.652 percent. The discount rate on the 52-week bill fell 3 basis points to 4.97 percent. In the futures pit, the December Treasury bond contract rose 6/32 to reach 113-04. See Bond Report.
Americas' markets and closing prices Wednesday
Latin American stocks closed mixed with Brazil's Bovespa the biggest loser, closing down 1.71 percent.
Argentina's Merval declined 2.810 points, or 0.53 percent, to 525.270; Brazil's Bovespa closed down 196 points, or 1.71 percent, to 11,263;
Chile's IGPA declined 33.22 points, or 0.69 percent to 4790.56;
Mexico's IPC rose 0.39 points, or 0.01 percent, to 4970.24;
Peru's Lima General lost 3.05 points, or 0.17 percent, to 1814.07; Venezuela's IBC rose 51.30 points, or 1.05 percent, to 4938.06.
Canada's TSE 300 Composite fell 75.49 points, or 1.04 percent, to 7063.60.
Yen rampages higher
With the Japanese markets closed for a public holiday Wednesday, the yen continued its rampage higher against both the dollar and the euro. Earlier in the global session, the greenback slumped 2.1 percent to 103.65 yen at one stage, its lowest level since January, 1996, before mounting somewhat of a comeback to 104.68 after the CPI data came out. The euro sank 2.1 percent to 107.31 yen, its lowest level against the Japanese currency since its inception.
Observers have said with optimism abounding that Japan's economy is growing, the yen is likely to continue strengthening. But Japanese officials are worried that a strong yen will hamper their country's exports. While the Bank of Japan has intervened in the currency markets by buying dollars and selling yen in an attempt to weaken the yen -- most recently on Tuesday -- this hasn't been enough to stop the Japanese currency's upward trajectory.
"People are looking for intervention beyond what they've done [so far]. The two options people are looking for are coordinated intervention with the U.S. and Europe or unsterilized intervention," said Francesca Fornovary, London-based currency strategist at Lehman Brothers.
The greenback fell 0.5 percent to 1.879 deutsche marks. The euro was off 0.5 percent at $1.0407, and sterling was 0.4 percent weaker at $1.614. See currencies.
For commodities see current commodities prices.
Europe's bourses follow U.S. decline
Stocks fell early on, reacting to the Dow's 1.1 percent loss Tuesday, then turned around after a benign U.S. August consumer price index raised hopes the Federal Reserve will leave interest rates on hold next month. But a late sell-off was sparked by selling on Wall Street after initial gains. See U.S. Market Snapshot and full story.
London's FTSE 100 index ended 48.30 points lower at 6,067.70 -- a five week closing low. Frankfurt's Xetra DAX descended 14.29 points to 5,387.18; and the Paris CAC 40 subtracted 35.37 points to 4,662.02. For London stocks see most active and for other bourses see International Indexes.
Interest rate uncertainty
In the U.K., banking and high growth telecommunications stocks had something of a mixed session due to uncertainties over the direction of interest rates in the world's biggest economy.
After the benign U.S. inflation data most advanced, but by the end of the session many were in the red.
Among banks, HSBC Holdings PLC (HBC: news, msgs) shed 28 pence, or 3.7 percent, to 717, the Royal Bank of Scotland PLC slumped 37 pence, or 3.2 percent, to 1115, and National Westminster Bank PLC (NW: news, msgs) lost 35 pence, or 3.1 percent, to 1086.
Heading north was Barclays Bank PLC (BCS: news, msgs). It tacked on 13 pence, to 1706. London's Times newspaper reported Wednesday that Barclays will shut corporate accounts in Russia within 30 days blaming the collapse of the nation's financial and regulatory financial systems. Barclays couldn't be reached for comment. Separately, Barclays signed a $80.5 million (50 million pounds) contract with Dell Computer Corp. (DELL: news, msgs) to centralize its global IT operations.
In the telecoms sector, Energis PLC (ENGSY: news, msgs) declined 35 pence, or 2.2 percent, to 1540, British Telecommunications PLC (BTY: news, msgs) sank 17 pence, or 1.8 percent, to 889, and Vodafone Airtouch PLC (VOD: news, msgs) slid 10 pence to 1262.
Over in Paris, highly rated telecoms stocks were also out of favor. Equant NV (ENT: news, msgs) fell 1.70 euros, or 2.3 percent, to 73.30, and Alcatel SA (ALA: news, msgs) descended 2.60 euros, or 1.9 percent, to 137.40.
SAP, DaimlerChrysler head lower
In Frankfurt the world's No. 1 maker of business software, SAP AG (SAP: news, msgs), tumbled 15 euros, or 3.45 percent, to 419.50 after its U.S. competitor, Oracle Corp. (ORCL: news, msgs), disappointed the markets with its first quarter financial results Thursday. See full story.
Shares in the automaker, DaimlerChrysler AG (DCX: news, msgs) subtracted 1,15 euros, or 3.45 percent, to 70.85 despite the company raising its revenue target for the year.
"We are now anticipating total revenues of approximately $155 billion for 1999," the company said in a statement. Previously the German-U.S. group had forecast revenues of over $148 billion for the year. See full story. In the U.S. Tuesday, staff at five DaimlerChrysler plants went on strike. See World Press Briefings.
Asian stocks fall; Japanese markets closed for a holiday
Asian stock markets were lower Wednesday, worried that the Federal Reserve might raise interest rates for a third time this year on the back of a jump in U.S. retail sales.
Japan's markets were closed for a public holiday and will reopen Thursday. Hong Kong's Hong Kong's Hang Seng dived 373.43 points, or 2.71 percent, to 13,430.60.
Fears of a U.S. rate hike spurred widespread selling in Australia, where the benchmark All Ordinaries index fell 1.3 percent to 2,937.8.
South Korean stocks fell 2.1 percent to 947.86 by 0455 GMT. Singapore's Straits Times index followed the regional downtrend, falling 0.4 percent to 2,134.11 by 0520 GMT.
Malaysian shares dropped 0.28 percent to 726.98, the lowest level since August 12 when Morgan Stanley Capital International said it would reinstate Malaysia to its emerging markets indices in February.
Thai stocks were flat. Indonesian stocks extended the previous day's losses in early trade as the market awaited new developments in the Bank Bali scandal after international financial agencies said they were suspending loans.
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