Tokyo shares end morning down on fresh US economic fears, stronger yen - UPDATE TOKYO (Thomson Financial) - Tokyo shares ended the morning session lower Monday after the unexpected drop in US payrolls in August stunned Wall Street and the Asian region, stoking fears of a recession in the world's largest economy. US jobs fell 4,000 in August, the first decline in four years and far below market expectations of an increase of 110,000. Investors sold shares of car makers and high-tech equipment makers on the grim outlook of their largest market abroad, with the situation made worse by the yen's surge in foreign exchange trading.
The bank and real estate sectors remained under pressure, mirroring continued worries about prospects for the US home mortgage and broader credit markets. The blue-chip Nikkei 225 Stock Average ended the morning down 340.49 points, or 2.
1 percent, at 15,781.67. The broader TOPIX index fell 30.
53 points, or 2.0 percent, to 1,526.49.
Decliners beat gainers 1,383 to 246 on the Tokyo Stock Exchange's first section, with 83 issues unchanged. Volume was an estimated 792 million shares, up from 729 million shares Friday morning. The revised gross domestic product data for the April to June period, released before the opening bell, showed a 0.
3 percent drop from the previous quarter, compared with the preliminary reading of a 0.1 percent rise. This is the first drop in three quarters.
Foreign investors were net sellers in orders placed through major foreign brokerages before the start of trading, following sharp falls Friday in US stocks. 'Selling pressure has eased after the initial reaction to falls Friday by US shares and the Chicago Nikkei futures. But the rebound is limited as there is a lack of incentive to actively seek out bargains, with the revised GDP data making investors cautious about the economic outlook at home,' said Yuta Yamaguchi, an equities information official at Daiwa Securities SMBC.
Despite the bearish mood, sentiment continues to find support from speculation of a cut in the US federal funds rate later in the month, as well as confidence in the growth prospects of emerging economies. (nyse: TM - news - people ) fell 190 yen or 2.9 percent to 6,410 as (nyse: HMC - news - people ) shed 100 yen or 2.
7 percent to 3,680. (nasdaq: NSANY - news - people ) edged down 18 yen or 1.7 percent to 1,076.
(other-otc: ISUZY.PK - news - people ) dipped 3 yen or 0.5 percent to 613, aided by a weekend report that the truck maker will ally with trading house (other-otc: SSUMF.
PK - news - people ) and Swaraj (other-otc: MZDAF.PK - news - people ) Ltd to produce mid-size buses in India later this month to take advantage of rapidly growing demand. In the tech sector, (nyse: SNE - news - people ) dived 290 yen or 5.
1 percent to 5,350 as Matsushita Electric Industrial fell 28 yen or 1.4 percent to 1,946. (nyse: CAJ - news - people ) lost 240 yen or 3.
8 percent to 6,040. The office equipment maker will spend 80 billion yen to construct a highly automated toner cartridge factory in Japan. Among others in the news, Mitsukoshi fell 7 yen or 1.
3 percent to 515 on the back of a report that the department store operator will likely post operating profit of 4.5 billion yen for the first-half ended August, below its forecast of 6.4 billion yen, hit by sluggish sales of summer clothing and fierce competition.
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