TOKYO: Tokyo share prices plunged more than seven percent Thursday on record volumes as investors rushed to take profit following weak Chinese data and after months of climbing.
The Nikkei 225 index at the Tokyo Stock Exchange closed down 7.32 percent, or 1,143.28 points, to 14,483.98, while the Topix index of all first-section issues was down 6.87 percent, or 87.69 points, at 1,188.34.
Trading was volatile with volume at a record 7.66 billion shares among first section issues against 6.38 billion yesterday.
The huge drop came after HSBC said manufacturing activity in China contracted in May for the first time in seven months in another sign of the weakness of recovery in the world's second-largest economy.
"The negative Chinese indicator triggered today's selling," said Hirokazu Fujikiki, strategist with Okasan Securities. "It was no wonder sizable selling could emerge as Japanese shares rose quite fast recently."
Earlier in the day, the Nikkei index, which closed at its best level in more than five years on Wednesday, had risen 0.23 percent, bucking the decline in New York the previous day.
The Dow Jones Industrial Average sank 0.52 percent to 15,307.17 while the dollar picked up Wednesday on Federal Reserve chief Ben Bernanke's suggestions that the bank could taper off its massive stimulus in the coming months.
Although Bernanke stressed that current economic conditions did not warrant an end to the Fed's aggressive measures at the moment, he said the Fed could pull back in the next few meetings if they improved. (AFP)
