Is the JAPAN STOCK MARKET Drop the START of a GLOBAL FINANCIAL COLLAPSE?
Japan's top government spokesman said on Thursday that Thursday's plunge by the Tokyo stock market was a temporary adjustment and that the Japanese economy is steadily picking up.
"Share prices appear to have been undergoing temporary adjustment over the past week," Chief Cabinet Secretary Yoshihide Suga told reporters.
"A rise in share prices over the past month has been extremely rapid ... In that regard, it would be unnatural if adjustment did not occur," Suga said.
The Nikkei share average dived to a five-week low on Thursday as the yen firmed further against the dollar.
Uncertainty about the U.S. Federal Reserve's next course of action and a sharp, sudden plunge on Wall Street sent Asian stock markets lower Monday.
Japan's Nikkei 225 index lost 3 percent to 13,359.16, echoing U.S. stock market losses Friday. The Dow dropped more than 200 points, its worst drop in six weeks. The Nikkei also weakened as the Japanese currency posted gains against the dollar, a currency movement seen as negative for Japan's exporters since their products become more expensive when sold overseas.
The Federal Reserve is spending $85 billion a month on buying bonds to push down interest rates in hopes of spurring borrowing and spending. That has propelled investors into stock markets in search of higher returns.
Encouraging reports on housing and hiring, along with a soaring stock market, have led many to suspect that the Fed could cut back on its bond buying in the coming months. Some believe the stock market could plunge without the Fed's support.
South Korea's Kospi fell 0.3 percent to 1,994.37. Australia's S&P/ASX 200 fell 0.5 percent to 4,903.90. Benchmarks in Indonesia, Singapore, the Philippines and Taiwan fell. Benchmarks in mainland China were mixed
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