Japanese shares plunge 4.0 percent, Yen up; US bond insurer woes renew

TOKYO, March 3, 2008 (AFP) – Japanese share prices tumbled 4.0 percent in morning trade on Monday, battered by a stronger yen and mounting worries about the health of the US economy, dealers said. The benchmark Nikkei-225 index was down 545.93 points or 4.01 percent at 13,057.09 by lunch, while the broader Topix index of all first-section shares lost 50.97 points or 3.85 percent to 1,273.31.

Stocks lost ground as “the yen shot up amid fresh fears of a worsening of the US economy,” said Kazuhiro Takahashi, equity department head at Daiwa Securities SMBC.

“Positive news on the US economy, which had brought some stability recently, has all been reversed now,” he said.

Investors were spooked by a media report that a planned bailout of US bond insurer Ambac Financial was running into snags, he added.

Ambac and other major bond insurers have been hard hit in the financial turmoil stemming from the US housing slump and related credit squeeze.

The dollar also remained under pressure, falling briefly into the 102-yen range for the first time in more than three years, stoking concerns about the outlook for the overseas earnings of Japanese companies. Stocks fell heavily on Wall Stre