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Tokyo stocks down 2.62% by break

Tokyo stocks fell 2.62 per cent Tuesday morning after weak US manufacturing data sent Wall Street and the dollar tumbling, as the Nikkei slipped into correction territory after its huge rally last year.

TOKYO: Tokyo stocks fell 2.62 per cent Tuesday morning after weak US manufacturing data sent Wall Street and the dollar tumbling, as the Nikkei slipped into correction territory after its huge rally last year.

The benchmark Nikkei-225 index was down 382.54 points to 14,236.59 by the break, after tumbling more than 3.0 per cent in opening trade.

The Topix index of all first-section shares lost 3.10 per cent, or 37.03 points, to 1,159.29.

Just over a month after the Nikkei ended 2013 with a world beating 57 per cent rally -- its best annual run in over four decades -- Japanese shares have fallen about 11 per cent as of Monday's closing price, a decline that analysts deem a correction.

The rise of the yen against the dollar has pushed down domestic stocks through the early weeks of 2014, after the currency's sharp decline through last year boosted the market through last year.

Tuesday's decline came as Wall Street suffered a sell-off after a surprisingly weak US manufacturing report sparked another round of selling amid concerns about the strength of the global economy.

Emerging markets have also been shaken with fears of capital flight as the US central bank pulled back again on its massive stimulus spending, widely credited for buoying global stock markets.

"Investors should steer clear of risk assets over the short-term as the turmoil does not look like it will be over anytime soon," Credit Agricole said.

The Dow Jones Industrial Average closed down 2.08 per cent at 15,372.80 on Monday.

The US data showed that the manufacturing sector growth slowed sharply in January. The Institute for Supply Management's purchasing managers index sank to 51.3 from 56.5 in December, not far above the 50 level between expansion and contraction.

Among firms reporting their nine-month earnings Tuesday, Toyota lost 4.47 per cent to 5,570 yen by the break, Panasonic shares were down 3.77 per cent to 1,096 yen while Sharp lost 4.62 per cent to 330 yen.

Sony, which reports its results on Thursday, fell 2.59 per cent to 1,540 yen.

Nintendo's hard-hit shares bucked the trend with a 0.62 per cent rise to 12,100 yen as it completed a share buyback.

A weaker yen gives Japanese exporters the flexibility to cut prices of the goods they sell overseas and it inflates repatriated profits, while a stronger yen undercuts those gains.

In currency trading, the dollar bought 101.22 yen, up from 100.94 yen in New York Monday afternoon but well down from 102.31 yen in Tokyo earlier Monday.

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