Nikkei drops heavily to start week badly

The Nikkei has slipped to its lowest closing level in almost a month after falling badly during trading today (December 16th).

It lost 1.6 per cent of its value to fall to 15,152.91 – a drop of more than 250 points for the session – which was a three-and-a-half week low for the index.

The Nikkei has not been this low since November 20th and today's poor performance of the market erases some of the recent gains it has amassed.

It was also a bad start to the week for the Topix, which fell by 1.3 per cent to 1,222.95, reports Reuters. All of the 33 subsections of the index were down.

Car stocks drop

Car manufacturers were among the big fallers on the index during trading today, as the dollar lost ground against the yen, falling away from a recent five-year high against the currency.

This resulted in Toyota Motor Corp losing 1.9 per cent and Honda Motor Co dropping by 2.8 per cent. Exporters such as the two manufacturers typically perform better on the Nikkei when the yen is weak compared to other major global currencies.

SoftBank Corp was the most traded stock by turnover and the stock slipped back by 3.2 per cent. weighing heavily on the market on the first day of the new week.

Among the reasons for the slow start to the week for the Nikkei was that investors are concerned about the prospect of the Federal Reserve in the US starting to taper its quantitative easing scheme when it meets this week.

Today's 1.6 per cent loss for the Nikkei is in sharp contrast to December 9th, just a week ago, when the index recorded its best daily rise in three months by jumping 2.3 per cent.

An upbeat jobs report from the US – with employment figures beating the expectations of analysts – was among the factors involved in the large rise in the value of stocks last Monday.

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