Japan's Nikkei index closes down 3.72pc

TOKYO: Tokyo shares tumbled 3.72 percent Friday, following a huge sell-off on US and European markets amid worries over the US economy and European debt crisis.

The Nikkei index at the Tokyo Stock Exchange closed 359.30 points lower at 9,299.88 -- a recovery after it dived on opening to its lowest level since the days after the March 11 quake-tsunami disaster.

The broader Topix index of all first section shares lost 3.07 percent or 25.40 points to 800.96.

The sharp falls, in line with huge losses across Asia, came after global investors dumped shares in Europe and on Wall Street, with the Dow Jones Industrial Average down 4.3 percent, its worst one-day drop since late 2008.

Japan, the US and Europe "need to stay in contact and coordinate policies in order to prevent the global economy from becoming trapped in pessimism," Economic and Fiscal Policy Minister Kaoru Yosano was quoted saying by media.

Investors were cautious ahead of US jobs data due out later Friday, said Takuya Yamada, senior portfolio manager at ITC Investment Partners.

"The market is pinning its hopes on tonight's US jobs data and the FOMC (Federal Open Market Committee) meeting next week" for signs of another round of quantitative easing, he told Dow Jones Newswires.

But many economists are expecting gloomy jobs numbers, after weeks of economic data have pointed to an almost stalled US economy in June and July.

"Concerns about the outlook of the US economy have been stronger than worries about a firmer yen," Monex market analyst Toshiyuki Kanayama said.

The market was growing increasingly pessimistic about whether governments around the world have the ability to stabilize financial markets, said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

Osakabe added that global stock prices likely haven't bottomed yet.

Investors were paying increasing attention to American politicians' ability to deal with their nation's expanding debt, as well as a possible economic downturn in the world's biggest economy, he said.

Meanwhile, the yen clawed its way back up against the dollar due in part to the US market plunge, a day after Japan intervened in currency markets to weaken the strong yen, which has hurt the country's exporters.

But the gain was capped by speculation that Japan might step back into the market if necessary.

The dollar stood at 78.49 yen, slipping from 78.93 yen in New York.

Shares tumbled across the board in Tokyo. Sony lost 5.04 percent to 1,828 yen, Toyota lost 3.18 percent to 3,040 yen and Mitsubishi UFJ Financial Group fell 2.55 percent to 382 yen. Retail giant Aeon lost 2.41 percent to 932 yen.

Copyright AFP (Agence France-Presse), 2011