Tokyo stocks tumbled Thursday as the yen spiked against the U.S. dollar after the U.S. Federal Reserve saying it will hold fire on rate hikes saw investors pile into the yen as a safe haven, with market fears compounded by Britain's possible exit from the European Union and the Bank of Japan also opting to stay pat on its monetary policy.
The 225-issue Nikkei Stock Average plunged 485.44 points, or 3. 05 percent, from Wednesday to close the day at 15,434.14, marking its its second-lowest level this year, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange tumbled 35.55 points, or 2.78 percent, to finish at 1,241.56.
During trading hours Thursday, the U.S. dollar tanked to 103 yen for the first time since August 2014, as investors have been doubly spooked by the U.S. Federal Reserve saying it has no plans to hike its rates in the near future and on concerns Britain may leave the European Union following an upcoming referendum on the issue. Japan's central bank on Thursday said it will contact The Bank of England and other central bank's regarding its concerns over Britain's "Brexit" moves.
Due to the yen's rapid increase, some market players said Thursday they expected the central bank to unleash more easing measures, but following a two-day policy meeting, the Bank of Japan opted to leave unchanged its monetary policy. The bank said it wanted to see how the effects of its negative interest rate will influence the economy, which barely escaped recession in the January-March quarter, as the bank continues to grapple with deflationary pressure, with sluggish exports and pressured corporate earnings adding to a bleak picture for the world's third-largest economy. All industry categories on the main section closed in negative territory, with real estate, nonferrous metals, and glass and ceramic products-linked shares comprising the biggest decliners. The day's turnover was 2,135.5 billion yen (20.38 billion U.S. dollars).
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