Nikkei suffers biggest fall in 8 months

<p>The Nikkei 225 has plunged as policymakers voice fears about the weakness of the yen.</p>

The Nikkei 225 in Japan has suffered its most significant one-day drop in eight months today (January 16th) after government ministers expressed their concerns about the weakness of the yen.

Just a day after jumping to a near three-year high, the Liberal Democratic Party's honeymoon period may now be over after storming the polls and enjoying a period of market prosperity following the general election on December 16th, which saw the Nikkei rally by around 24 per cent over the past two months.

The yen has softened by one per cent versus the dollar for two months now, but it has rebounded in the past two days, raising concerns the key Japanese export market may suffer.

Japan – which is the world's third-largest economy – is currently in recession, having contracted for two consecutive fiscal quarters.

At close of play in Tokyo this morning, the Nikkei 225 fell by 2.5 per cent to 10600.4 points.

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