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Japan stocks plunge

December 10, 2014

Joining a global sell-off across global markets, Japanese stocks have taken a dive too with investors eager to lock in profits. The plunge comes just days ahead of snap elections in the world's third-largest economy.

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Tokyo Stock Exchange
Image: picture-alliance/dpa

Shares trades at the Tokyo Stock Exchange dipped by 2.25 percent Wednesday, with the benchmark Nikkei index losing over 400 points and suffering the worst plunge in more than three weeks.

"After the recent buying binge that boosted the Nikkei to a seven-year high, investors wanted to square positions to lock in profits," SMBC Friend Securities economist Toshihiko Matsuno told AFP. "They were waiting for a cue for selling," he added, noting that Monday's downward revision of Japanese growth was too small a signal.

But the 5-percent drop in Shanghai on Tuesday didn't leave investors unfazed, the economist insisted.

Uncertain consumers

Also on Wednesday, a benchmark Japanese index on domestic consumer confidence dropped for the fourth month in a row in October, reaching its lowest level since April.

It appeared that consumers were still impacted by a 3-percent sales tax hike in April of this year, with yet another VAT increase postponed by the government of Prime Minister Shinzo Abe.

The new figures came ahead of snap elections in the country this coming Sunday in which Abe aims to secure support for his economic policies.

hg/uhe (AFP, Reuters, dpa)