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Japan leads Asian shares' plunge Japan leads Asian shares' plunge
(20 minutes later)
Japan's benchmark Nikkei has fallen by 5.52% in morning trading, and at one point was 7.59% down on the day. Japan's benchmark Nikkei has fallen by 5.52% in morning trading, and at one point was 7.59% down on the day, as recession fears rattled investors.
South Korea's stock price index tumbled nearly 8% while markets in New Zealand, Hong Kong and Australia also declined. South Korea's stock index fell nearly 8% while markets in New Zealand, Hong Kong and Australia also declined.
The falls came as new figures showed Japan's trade surplus plunged 94% in the last year due to weak exports and soaring energy import costs. Fears grew that weak exports could push Japan into recession, amid news that its trade surplus plunged 94% to 95.1bn yen ($970.1m; £596.7m) in September.
Meanwhile, the White House has said a global summit to tackle the financial crisis will be held next month. Meanwhile, the White House will hold a global summit on the crisis next month.
The meeting will debate the reforms needed to avoid another financial crisis and look at the progress currently being made. The meeting will debate the reforms needed to avoid another financial crisis and look at the progress currently being made. Leaders from the G20 group of nations - the world's leading industrialised countries and major developing nations - will attend.
Leaders from the G20 group of nations - the world's leading industrialised countries and major developing nations - will attend. Export fears
'Risk factor'
In Tokyo, the Nikkei fell sharply as soon as the markets opened, and at one point was trading at 8,016.61, its lowest level for more than five years.In Tokyo, the Nikkei fell sharply as soon as the markets opened, and at one point was trading at 8,016.61, its lowest level for more than five years.
The impact of the global slowdown has had a clear impact on Japan's exports Tatsushi Shikano, Mitsubishi UFJ Securities
Japan's benchmark index has now lost 30% of its value in the space of a month.Japan's benchmark index has now lost 30% of its value in the space of a month.
The latest fall came after news that the country's exports grew only 1.5% in September from a year earlier, far below forecasts. Exports of Japanese cars to the US fell.
The dollar hit a seven-month low against the yen, prompting fears that this will cause further damage to already weak exports.
"The impact of the global slowdown has had a clear impact on Japan's exports and this was even before the financial crisis erupted in September," Tatsushi Shikano, senior economist, Mitsubishi UFJ Securities.
"Sluggish export volumes will put a drag on Japan's industrial output and its export-reliant economy in the coming months," he added.
Shares in exporters tumbled, with shares in NEC down 12% after the electronics maker cut its annual operating profit forecast by a third.
Elsewhere in Asia, the Korean won lost 5% of its value against the dollar.
Gloomy Wall Street
The plunge came in the wake of Wednesday's trading on Wall Street, which lost 5.69%, amid an increasingly gloomy outlook for the global economy.The plunge came in the wake of Wednesday's trading on Wall Street, which lost 5.69%, amid an increasingly gloomy outlook for the global economy.
Analysts say Japanese investors are also showing concern about the strengthening yen, fearing it will cause further damage to the already badly squeezed export industry.
"Rapid fluctuations in the stock and currency markets are risk factors to the economy," said Jun Matsumoto, a deputy chief cabinet secretary, at a Tokyo press conference.
In Seoul, the Korean won lost 5% of its value against the dollar.
'Rapid deterioration'
Job cuts at Yahoo and drugs firm Merck have increased economic concerns in the United States.Job cuts at Yahoo and drugs firm Merck have increased economic concerns in the United States.
Investor sentiment was also hit by warnings from both UK Prime Minister Gordon Brown and Bank of England Governor Mervyn King that Britain was most likely now entering its first recession in 16 years. Wall Street stocks tumbled on fear of a global recession
Stocks were also dragged down by commodity stocks tracking weaker oil and copper prices.Stocks were also dragged down by commodity stocks tracking weaker oil and copper prices.
Crude prices were down to 16-month lows on signs of falling demand. US light crude was down $5.52 to $66.66, its lowest point since June 2007.Crude prices were down to 16-month lows on signs of falling demand. US light crude was down $5.52 to $66.66, its lowest point since June 2007.
Brent was down $5.02 to $64.70. Opec is now expected to cut production when it meets on Friday to try to shore up prices.Brent was down $5.02 to $64.70. Opec is now expected to cut production when it meets on Friday to try to shore up prices.
Widespread sell-off
Wall Street's main Dow Jones index ended down 5.7% or 514 points to 8,519 on Wednesday, while in Europe, the UK's FTSE 100 lost 4.5%, and Germany's Dax fell 4.5%.
"It appears that investors are rethinking their assumptions about the depth and duration of the recession," said Fred Dickson, chief market strategist at DA Davidson."It appears that investors are rethinking their assumptions about the depth and duration of the recession," said Fred Dickson, chief market strategist at DA Davidson.
"They are recognising that the credit crisis has taken an annoying economic slowdown into something far more serious.""They are recognising that the credit crisis has taken an annoying economic slowdown into something far more serious."
Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said attention had turned from a banking crisis - which was now considered to have been largely averted - to the possibility of recession. Investor sentiment was also hit by warnings from both UK Prime Minister Gordon Brown and Bank of England Governor Mervyn King that Britain was most likely now entering its first recession in 16 years.
"The question is, how long and deep will it be?"
He said UK GDP figures, due to be released on Friday, were likely to be in negative territory and the market was "steeling itself".