Japan's Nikkei ends morning session down 2.15pc

TOKYO: Japan's Nikkei index ended the morning session down 2.15 percent on Friday after shares on Wall Street and in Europe plunged on deepening worries about the global economy dipping into recession.

The headline index at the Tokyo Stock Exchange lost 192.09 points to 8,751.67 by the lunch break.

The Topix index of all first-section shares fell 1.89 percent or 14.50 points to 752.81.

A strong yen, standing at 76.53 to the dollar in morning trade from 76.52 overnight in New York, also weighed on sentiment and encouraged selling in exporter shares, dealers said.

Banking and financial shares faced pressure after European and US stocks fell sharply on weak US economic data and renewed concerns about the eurozone debt crisis, analysts said.

The Dow Jones Industrial Average closed down 3.68 percent following an earlier rout on Europe's bourses.

New York's broader S&P 500 sank 4.46 percent, while the tech-heavy Nasdaq Composite tumbled 5.22 percent.

The feared global slowdown and a strong yen threaten the fragile post-earthquake recovery of the world's number three economy, analysts said.

"The deterioration in the global economy will shatter expectations for Japan's V-shaped recovery," said Yutaka Shiraki, a senior equity strategist at Mitsubishi UFJ Morgan Stanley Securities.

The strong yen pressured Japan's automakers, amid concerns that more Japanese production will be forced to move overseas in order for products to remain competitive.

In a research note, Credit Suisse said Japan's auto sector faces likely restructuring, including eliminating yen-denominated costs, if the Japanese unit remains at current levels or further strengthens.

Honda Motor dropped 2.97 percent to 2,412 yen, Toyota Motor slipped 1.74 percent to 2,758 and Nissan Motor plunged 3.80 percent to 657.

Firms with exposure to Europe were also hit as the yen strengthened. Nikon was off 4.67 percent at 1,630, Canon fell 2.67 percent to 3,455 and Sony slumped 2.85 percent to 1,599.

The euro stood at $1.4317 and 109.59 yen, from $1.4337 and 109.70 yen in New York.

Copyright AFP (Agence France-Presse), 2011