Nikkei drops to two-month low

<p>The Nikkei has continued to fall.</p>

The Nikkei has fallen again in today's (June 6th) trading and is now down to a new two-month low for the index.

It lost almost one per cent and ended the day at 12,904.02, which is its lowest closing figure since April 5th.

Masayuki Kubota, senior fund manager at Daiwa SB Investments, told Reuters that the Nikkei could be set to go through more falls in the coming weeks and months.

"We are in the transition phase… The Nikkei has lost a substantial amount of points already, but a correction period will take longer," he said, adding it might take three months for the market to start pricing in companies' fundamentals and this process is currently halfway through.

The Nikkei hit five-and-a-half year highs last month, but has been falling steadily in the last two weeks, with a drop of almost four per cent yesterday after a speech by Japanese prime minister Shinzo Abe was badly received by investors.

Stan Shamu, market strategist at IG, said in a note that the premier's comments were not a "game changer" for the Asian economy.

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