Tokyo stocks end down 2.08%
January 23, 2013 - 9:11:43 am
TOKYO: Tokyo stocks tumbled 2.08 percent on Wednesday, extending losses from the previous day, as a lack of surprises in the the Bank of Japan's monetary policy announcement left dealers disappointed.
The benchmark Nikkei 225 index shed 222.94 points to 10,486.99, while the broader Topix index of all first-section shares was down 1.48 percent, or 13.36 points, at 887.79.
The central bank on Tuesday adopted a two-percent inflation target following government pressure, in a bid to tackle long-running deflation, and launched an unlimited asset purchase scheme to kick in from next year.
However, with the measures already factored into prices over the past few weeks, a sell-off followed the closely-watched announcement.
"The BoJ monetary policy announcement came so completely within range of market expectations that it rang as a disappointment," SMBC Nikko Securities general manager of equities Hiroichi Nishi said.
In forex trade, the greenback weakened to 88.16 yen, from 88.68 yen in New York late Tuesday, while the euro fetched 117.37 yen from 118.14 yen.
A stronger yen tends to weigh on Tokyo's stock market as its hurts exporters by making their products less competitive overseas.
Sony closed 2.09 percent lower at 1,167 yen, Nikon fell 2.99 percent to 2,558 yen and Toyota lost 2.00 percent at 4,155 yen.
Japan's hawkish new premier Shinzo Abe on Tuesday described the policies, outlined in a rare joint BoJ-government statement, as "epoch making".
Abe, who swept to power last month, has moved to bring BoJ policies into line with his new government's plan for big spending and aggressive monetary policy to stoke growth.
But some observers were underwhelmed, criticising the inflation target's vague timeline and saying 13 trillion yen in planned monthly asset purchases was unlikely to save the economy.
"Calling a policy 'bold' does not necessarily make it so," London-based Capital Economics said in a note.
An equity trading director at a foreign brokerage told Dow Jones Newswires: "Overseas buying activity is light, as if the party has ended. Players are taking profits in stocks that have been overbought over the last several weeks."
In other trading, Olympus inched up 0.05 percent to 1,986 yen after jumping more than six percent on Tuesday on hopes that the camera and medical equipment maker would be taken off the Tokyo Stock Exchange's "supervisory post" that signals a possible delisting.
The company was put on the list after a high-profile accounting scandal. (AFP)