(RTTNews) - The Japanese stock market plummeted more than 6% on Tuesday, extending Monday’s losses, after U.S. stocks plunged overnight on word that the world’s largest economy officially entered a recession in December 2007. Additionally, a stronger yen dragged down exporters. Concerns about a possible net loss at Goldman Sachs also soured investor sentiment in late trade. The benchmark Nikkei 225 Index closed down 533.5 points or 6.4% at 7,863.7 and the broader Topix index of all the Tokyo Stock Exchange First Section issues fell 40.4 points or 4.9% to 787.1.

In the currency market, the U.S. dollar plunged to the lower 93-yen levels in late Tokyo deals from the upper 93-yen range in early trade and Monday’s close of 95.05-08 yen in Tokyo. The dollar is currently at 93.28-93.32 yen.

U.S. stocks ended Monday’s session sharply lower, snapping five straight sessions of strong gains, on profit taking, disappointing economic news and official confirmation that the U.S. is in a recession since December 2007. The Dow plunged 680.0 points or 7.7% to 8,149.1, the Nasdaq slumped 137.5 points or 9.0% to 1,398.1 and the S&P 500 tumbled 80.0 points or 8.9% to 816.2.

Crude oil fell to its lowest level in more than three years on Tuesday in Asia on signs that the U.S. economy is in a more severe economic slowdown than expected. At 2:23 a.m. ET, oil was quoted at $47.66 a barrel, down $1.62 after the contract for January delivery plunged 9% or $5.15 to settle at $49.28 a barrel on the New York Mercantile Exchange on Monday.

On the economic front, the Bank of Japan said on Tuesday that Japan’s monetary base was up 1.9% on year in November to 88.85 trillion yen. This came in higher than analyst expectations that had forecast the base to remain at the previous annual expansion of 1.4%. Seasonally adjusted, the monetary base added 7.9% on year to 90.446 trillion yen.

In the banking space, Mitsubishi UFJ slumped 6.9%, Mizuho Financial shed plummeted 8.4%, and Sumitomo Mitsui fell 7.8%. Top brokerage Nomura Holdings sank 9.7% after the company said Monday that it would issue up to 410 billion yen worth of bonds in its first fund-raising since acquiring units of failed U.S. investment bank Lehman Brothers.

Export-oriented stocks, Sony fell 4.6%, Canon dropped 6.2%, Advantest shed 8.6%, Fanuc tumbled 6.9%, Kyocera sank 7.0%, and Nikon slumped 7.2%. Toyota Motor slid 3.6% after its officials said that the top Japanese automaker would trim domestic production of luxury Lexus passenger car models sold overseas and Honda Motor dropped 6.9%.

Among commodity-related stocks, Inpex Holdings plunged 10.1% and Japan Petroleum Exploration lost 8.3%. Trading house Mitsubishi Corp slumped 10.1% and Itochu shed 12.2%.

Among gainers, Tokyo Gas jumped 4.1%, becoming the top positive contributor to the Nikkei 225.

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Posted in Categories: Economy, Japan, Releases, USA.

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