Feb 09, 2016 (LBO) – Japan’s Nikkei fell 5 percent on Tuesday on weaker banking shares after the Bank of Japan allowed negative interest rates, while a stronger yen dragged down stocks across the board.
The Nikkei dropped fell to 16,139 points in mid morning trade while China and Hong Kong markets were closed for the Lunar New Year.
Out of Japanese financial stocks, Mitsubishi UFJ Financial Group fell 7.2 percent, Sumitomo Mitsui Financial Group dropped 6.6 percent and Mizuho Financial Group shed 5.3 percent.
The drop comes amidst less chances of the U.S. Federal Reserve raising interest rates over China worries and the impact of Japan’s negative interest rates.
The probability of a June rate hike, based on CME Fed Fund Futures, fell to 16 percent, and a rate hike by December this year is down to 29 percent.
MSCI’s All-Country World Index has lost more than 18 percent from an all-time high reached in May but the gauge fell just 0.4 percent on Tuesday as a majority of markets in the region were closed.