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 February 8, 2016 - 12:46 PM EST
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UPDATE1: Tokyo stocks dive almost 5% on strong yen, weak global stocks

Tokyo
stocks nose-dived Tuesday morning, with the Nikkei index down almost 5 percent and shedding more than 800 points, as the yen surged and European and
U.S.
stocks ended lower overnight.

The 225-issue Nikkei Stock Average shed 836.09 points, or 4.92 percent, from Monday to 16,168.21. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 69.46 points, or 5.03 percent, to 1,310.95.

Every industry category on the main section lost ground led by securities, banks and financial issues.

Tokyo
stocks opened sharply lower, quickly extending losses and hitting a roughly three-week intraday low with the yen gathering steam as the session wore on. The Nikkei index shed as much as 845 points, its biggest one-day drop since late August last year.

After hovering around the 117 yen line the previous day, the yen pushed higher against the dollar, briefly rising to the upper 114 zone Tuesday morning.

"The combination of concerns that

the United States
could be heading toward a recession and the global stock sell-off is curbing risk appetite and is sending investors to the safe-haven yen," Takuya Takahashi, senior strategist at Daiwa Securities Co., said.

Takahashi added that financial stocks mainly led the sell-off on the

Tokyo
bourse after the sector came under pressure in
the United States
and
Europe
overnight.

Analysts also said

Tokyo
stocks continued to slide as investors bid up the safe-haven 10-year Japanese government bond. The key bond yield hit 0 percent Tuesday morning as investors continued to buy the debt following the Bank of Japan's announcement in late January that it will adopt a negative interest rate.

Oil prices coming under renewed pressure weighed on the market as well, analysts said. Crude oil futures prices fell below the $30 line for the first time in roughly one week in

New York
on Monday to $29.69 per barrel on dimming prospects that members of the Organization of the Petroleum Exporting Countries will cut production.

On the First Section, declining issues trounced advancing issues 1,881 to 36, while 15 ended the morning unchanged.

Financial issues dropped following the sell-off of the sector in the

U.S.
and
Europe
overnight, analysts said.

Nomura Holdings dived 60.70 yen, or 10.8 percent, to 500.10 yen while Mitsubishi UFJ Financial Group plunged 42.40 yen, or 7.9 percent, to 495.80 yen.

Mizuho Financial Group plunged 10.60 yen, or 5.8 percent, to 171.00 yen after the megabank said Monday it will cut rates for some deposits following the BOJ's decision to adopt a negative interest rate.

Resource-related issues underperformed as the oil rout resumed with Inpex diving 51 yen, or 4.9 percent, to 980 yen.

==Kyodo

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Source: Equities.com News (February 8, 2016 - 12:46 PM EST)

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