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.

Learn about the Asian markets and find spread betting tips at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.