Tokyo stocks rebound after Christmas slump

Tokyo stocks plunge in Christmas rout

Tokyo stocks plunged five percent on fears about the US economy and a government shutdown in Washington. AFP

Japan's benchmark Nikkei 225 Stock Average tumbled 5 percent into a bear market as the global equity rout continued unabated in the last week of the year, with renewed turmoil in Washington rattling investors.

"Investors rushed to buy stocks thinking they won't fall lower than this", said Maki Sawada, vice president of the investment research and investor services department at Nomura Securities Co., referring to the index's fall the previous day below the psychologically important 20,000 line for the first time in 15 months.

"Ever since Trump started his trade protection, the trade war stuff, the markets have not liked it".

Japanese stocks recovered slightly on Wednesday after suffering their worst finish in nearly two years, but other Asian markets were mixed after President Donald Trump marked Christmas with a renewed attack on the Federal Reserve. The bearish sentiment also reflected intensifying concerns about the USA political situation following the news of a possible prolonged US government shutdown, the potential dismissal of Federal Reserve Chairman Jerome Powell and the resignation of Defense Secretary James Mattis, brokers said.

Investors are on edge as United States stock markets prepare to reopen after a brutal Christmas Eve rout.

"I have great confidence in our companies", he told reporters.

Damascus must take over E. Syria after U.S. troops withdrawal - Moscow
The deployment was co-ordinated with the US-backed Kurdish militia in Manbij, the spokesman for the Manbij Military Council said. Ankara regards the YPG as terrorists and has been infuriated by USA support for the group in the fight against Islamic State.

Trump, speaking in Washington on Tuesday, sought to portray the decline in stocks as a positive for investors.

The yen's retreat against the dollar compared with levels earlier this week also buoyed Japanese export-related issues amid expectations for a rise in their overseas earnings, the brokers added.

Although the chairman of the Federal Reserve, Jerome Powell, was nominated by Trump, the Fed is not under the control of the White House, much to Trump's consternation.

Wall Street stocks extended their steep sell-off on Monday, with the S&P 500 dropping almost 15 percent so far this month, as investors were rattled by the U.S. Treasury secretary's convening of a crisis group and by other political developments.

Mnuchin was widely panned by market watchers over a phone call on Sunday with the six biggest USA banks, reporting on Twitter that the six CEOs have "ample liquidity" available.

As of 10:30 AM, the Nikkei index was trading at 20040, up around 700 points from Wednesday's close.

Latest News