While stock markets around the world have weakened recently, most are still not too far from multi-year highs, if not all-time highs. Japan's has been a conspicuous exception, and today's performance exacerbates its underperformance. Bloomberg reports:
Japanese stocks dropped, driving the Topix index to the lowest in more than two years, after reports of subprime losses at U.S. banks sent the dollar tumbling, clouding the profit outlook for companies including Canon Inc...
The Nikkei 225 Stock Average lost 386.33, or 2.5 percent, to 15,197.09 at the close of trading in Tokyo, a level not seen since July 2006. The broader Topix declined 37.95, or 2.5 percent, to 1,456.40, the lowest since Oct. 31, 2005. All 33 industry groups included in the gauge fell.
Economic data out of Japan today wouldn't have encouraged investors. An index of consumer confidence fell to 42.8 in October from 44.1 in September while wholesale inflation accelerated to 2.4 percent in October from 1.7 percent in September.
China's Shanghai Composite Index fell sharply today as well, closing 2.4 percent down at 5,187.7. Over the weekend, the central bank had announced another half percentage point increase in the bank reserve ratio requirement to 13.5 percent. But China still faces a flood of liquidity because of its huge trade surplus, which hit another record in October.
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