TOKYO, June 28, 2006 (AFP) – Japanese share prices tumbled Wednesday on the tail of a weaker Wall Street as investors grew increasingly anxious about the prospect of higher US interest rates, dealers said.
They said that the US Federal Reserve is widely expected to raise rates by a quarter percentage point at the end of its two-day policy meeting Thursday but investors are worried about the chances of further rises.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index fell 285.70 points or 1.88 percent to 14,886.11. The broader TOPIX index of all first-section shares lost 21.86 points or 1.41 percent to 1,527.51.
Losers led winners 1,429 to 212, with 54 stocks unchanged.
Trading volume was 1.47 billion shares, unchanged from Tuesday.
"Share prices were sharply lower on the back of the slump in US markets while sentiment remains nervous ahead of the FOMC meeting," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
SMBC Friend Securities chief strategist Fumiyuki Nakanishi said some market players were fretting about the possibility of the US central bank announcing a surprise half-percentage-point increase Thursday.
The renewed weakness in the market saw some speculators who had bought futures contracts moving to unload them, dealers said.