Japanese Market Trades Weak On Wall Street Cues, Stronger Yen

The Japanese stock market is down sharply on Monday with investors indulging in some heavy selling across the board following a setback on Wall Street last Friday on the back of the U.S Securities and Exchange Commission slapping fraud charges on Goldman Sachs. A stronger yen is also contributing to the decline in Tokyo.

The benchmark Nikkei 225 index plunged below the 11,000 mark for the first time since March 29, and is currently trading at 10,911, down 191.2 points or 1.73% from its previous close.

Banking, automobile and construction stocks are mostly down in the red with notable losses. Electric power, gas, retail and pulp & paper stocks are trading mixed.

Sumitomo Trust & Banking is down as much as 4%. Sumitomo Mitsui Financial, Mizuho Trust & Banking, Mizuho Financial, Mitsubishi UFJ Financial, Shinsei Bank, Resona Holdings, Chiba Bank and Shizuoka Bank are also down with notable losses.

Shares of Toyota Motor Corp. declined following an announcement from the company on Friday that it will recall 740,000 Sienna minivans sold in the U.S. and Canada. Hino Motors, Nissan Motor, Isuzu Motors, Honda Motor, Suzuki Motor and Mitsubishi Motor are also trading lower.

Japan Tobacco, Nomura Holdings, Inpex Corp., Daiwa Securities, Mitsui, Dowa Holdings, Konica Minolta, Sumitomo Metal, Nippon Light Metals, Fujitsu, Heiwa Real Estate, Advantest and Aeon are all trading in negative territory with notable losses.

Shares of KDDI Corp. tumbled to a year-to-date low after the company said its group net profit likely sank 5% on the year to 212.5 billion yen for the year through March.

In the currency market, the U.S. dollar traded in the upper 91 yen zone in early deals in Tokyo, slightly down from Friday's closing levels. The yen is currently trading at 92.08 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Australia, Shanghai, New Zealand, Singapore, South Korea and Taiwan are down with notable losses. Malaysia is also trading weak. Markets across the region closed firmly lower on Friday.

On Wall Street, stocks declined sharply on Friday, as the Securities and Exchange Commission brought fraud charges against Wall Street giant Goldman Sachs, whipping up a storm of uncertainty in the markets. The major averages all closed sharply lower on the day, snapping a six-session winning streak.

The SEC charged Goldman Sachs and one of its vice presidents with fraud, sending markets into a tailspin. Goldman stands accused of creating a collateralized debt obligation designed to fail while also shorting the instrument, resulting in a substantial gain for the firm.

The Dow ended lower by 126 points or 1.1% at 11,018.6, the Nasdaq declined 34.4 points or 1.4% to 2,481.3 and the S&P 500 tumbled by 19.5 points or 1.6% to 1,192.1.

Major European markets closed markedly lower on Friday. The U.K.'s FTSE 100 index lost 1.4%, while the German DAX index and the French CAC 40 index declined by 1.8% and 1.9% respectively.

Oil prices fell sharply on Friday with an unexpected decline in U.S. consumer sentiment and the fraud charges slapped on Goldman Sachs dampening the mood. Light sweet crude for May delivery settled at US$83.24 a barrel, down US$2.27 on the session.