Japan's Nikkei Opens Sharply Lower After ECB Decision
Tokyo stocks opened sharply lower on Friday, extending a global equities rout after the European Central Bank's stimulus plan disappointed investors.
Wall Street fell on Thursday, following European markets downward after the ECB decided not to expand the size of its bond purchase programme as hoped and lowered its deposit interest rate by less than expected.
ECB chief Mario Draghi said the bank would broaden the types of bonds it purchases and extend the end date of the bond purchase programme.
In response, the euro soared 3.1 percent against the dollar and 2.6 percent on the yen.
In Friday morning Asian trading, the single currency was little changed at $1.0946 and 134.14 yen from $1.0947 and 134.23 yen in US trade. But it was way above the $1.0592 and 130.63 yen seen in Tokyo on Thursday before the ECB meeting.
"The market was hoping for some Draghi magic, but instead got some Draghi shock," Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group, told Bloomberg News.
"I'd thought that for a recovery in the European economy we'd need some bold easing measures, but since Draghi seems to be taking the economic recovery lightly, it's possible that it could take a turn for the worse for some time."
The benchmark Nikkei 225 index at the Tokyo Stock Exchange was down 1.62 percent, or 323.38 points, at 19,616.52 in opening deals, while the broader Topix index of all first-section shares dropped 1.64 percent, or 26.31 points, to 1,576.63.
In other currency trading, the dollar slipped to 122.54 yen from 122.61 yen Thursday in New York and 123.46 yen in Asia.
Japanese exporter shares suffered from a stronger yen, which weighs on exporters' competitiveness and overseas profitability.
Investors are now looking for the outcome of a US jobs report later on Friday that will give more clues about the likelihood of a small increase in US borrowing costs.
The Federal Reserve is widely expected to raise near-zero interest rates at its last monetary policy meeting of the year later this month.
The Dow Jones Industrial Average lost 1.42 percent, while the broad-based S&P 500 fell 1.44 percent and the tech-rich Nasdaq Composite Index dropped 1.67 percent.
