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Nikkei plunges 2%

Japan's benchmark Nikkei 225 Stock Average tumbled just over 2 per cent Wednesday as investors showed disappointment over the central bank's latest plan to counter deflation.

The Nikkei lost 222.94 points, or 2.08 per cent, to end at 10,486.99 while the broader-based Topix index was down 13.36

A man looks at his watch as he passes an electronic board displaying a graph of currency rates outside a brokerage in Tokyo. Credit: REUTERS

points, or 1.48 per cent, at 887.79.

On Tuesday, the central bank decided to set a target of 2-per-cent inflation to counter chronic deflation and the strong yen, which hurt the economy.

The target was requested by Prime Minister Shinzo Abe, who took office in late December.

However, “the vast majority of analysts expressed disappointment” with the bank's announcement, Richard Katz, editor-in-chief of the Oriental Economist, said in his newsletter.

“It is hard to see how changing to a 2-per-cent (target) has in any way changed the BOJ's actual operating procedure or perspective,” he said.

On currency markets at 3 pm (08:00 SA time), the dollar traded at 88.32-33 yen, down from Tuesday's 5 pm quote of 89.08-09 yen.

The euro was quoted at 117.55-58 yen, down from 119.02-03 yen late Tuesday, and at 1.3309-3310 dollars, down from 1.3358-3361

dollars. - Sapa-dpa

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