TOKYO: Japanese share prices fell 1.27 per cent by the lunch break on Friday, hit by losses on Wall Street where concerns grew that the US Senate
would vote down an auto sector rescue package.
The benchmark Nikkei-225 index dropped 110.37 points to 8,610.18, easing off a one-month high. The broader Topix index of all first section issues lost 6.06 points, or 0.71 per cent, to 843.19.
"As Tokyo had gained ground for four straight days, investors are adjusting their positions ahead of the weekend and after seeing the drop in New York," said Hideaki Higashi, a strategist at SMBC Friend Securities.
The yen's rise against the dollar also weighed on the market, he said.
In New York on Thursday, the Dow Jones Industrial Average slid 2.24 per cent as investors fretted over a 14-billion-dollar rescue plan for the troubled US auto industry.
Investors discounted a media report that Japan's government plans to increase a stimulus package to some 40 trillion yen (437 billion dollars) as Asia's largest economy rapidly worsens.
Prime Minister Taro Aso, who unveiled a 26.9-trillion-yen boost in late October, is struggling amid voter discontent with his handling of a rapidly worsening economy.
"The reported sum is big but (Aso) is already a lame duck," Higashi said.
"We do not know how seriously we should believe the reported measures would be implemented," Higashi said, noting Aso needed to pass a supplementary budget bill to finance the package, but his unpopular government was faltering.
