Tokyo’s Nikkei dives more than 3 percent on slowdown fears

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TOKYO, March 25, 2019 (BSS/AFP) – Tokyo’s benchmark Nikkei-225 index dived
more than three percent in morning trade on Monday, as fears grew over a
global economic slowdown.

At about 10:00 am (0100 GMT), the Nikkei was down 3.15 percent, or 682.18
points, at 20,945.16, after it opened down more than two percent.

Masayuki Kubota, chief strategist at Rakuten Securities, said the dovish
US Federal Reserve decision last week was a relief for stock markets but “it
also alarmed investors as it suggested the global economy is worsening”.

“A 2019 global slowdown has not yet fully been factored in. Recently, data
after data show worsening of the global economy,” he said.

“It is possible that the Nikkei will fall near 20,000 if the yen rises
further,” he added, noting it would provide a good opportunity to buy as the
global economy is expected to rebound in 2020.

On Friday, US stocks dropped after the closely watched yield curve flashed
a warning sign that a recession could be looming.

The yield curve, which tracks the spread between short- and long-term
rates on US Treasury bonds, briefly inverted on Friday, with yields on three-
month bonds falling below those for 10-year notes — the first time this had
happened since before the global financial crisis in 2007.

The yield curve has inverted prior to all recessions in recent decades.

The Japanese market is also being weighed down by weakness in exports to
China, Tsuyoshi Nomaguchi, strategist at Daiwa Securities, said in a
commentary.

Investors are awaiting a series of data this week, including US housing
starts for February on Tuesday and Japan’s factory output for February due on
Friday, he added.

The dollar fetched 109.73 yen in late morning Tokyo trade, against 109.93
yen in New York on Friday.

In Tokyo, blue-chip exporters were lower across the board, with Sony
falling 2.63 percent to 4,582 yen, Panasonic off 2.67 percent at 932.5 yen,
Honda down 3.43 percent at 2,949 yen and construction machine maker Komatsu
diving 5.40 percent to 2,521 yen.

On Wall Street, the Dow closed down 1.8 percent at 25,502.32.