Japanese Stocks Plunge; Dollar Lower

A cyclist stops and reads updated stock prices in Tokyo Monday, Nov. 27, 2006. Japanese stocks rose Monday morning on gains in banking, software and chemical manufacturer stocks. The benchmark Nikkei 225 index rose 69.33 points, or 0.44 percent, to 15,803.93 points on the Tokyo Stock Exchange at midday Monday. (AP Photo/Katsumi Kasahara) (Katsumi Kasahara - AP)

TOKYO -- Japanese stocks plunged Tuesday morning following Wall Street's worst day in more than four months. The dollar was lower against the yen.

The benchmark Nikkei 225 stock index shed 180.37 points, or 1.14 percent, to 15,705.01 points on the Tokyo Stock Exchange Tuesday. The index rose 150.78 points, or 0.96 percent, to finish at 15,885.38 points on Monday.

The Nikkei's plunge came after the Dow Jones industrial average lost 158.46, or 1.29 percent, to 12,121.71 overnight. It was the Dow's biggest slide since a string of triple-digit declines in mid-July that followed disappointing profit reports and a spike in oil prices amid tensions with Iran and North Korea.

Wall Street's drop hurt sentiment toward export-oriented shares in Tokyo, including electronics manufacturers and automakers.

Meanwhile, Japanese Finance Minister Koji Omi said the government plans to cut bond issues for the next fiscal year starting April as the country's economic recovery would likely boost tax revenues.

Japan has struggled with high government debt, and the government of new Prime Minister Shinzo Abe has pledged to rein in spending.

The broader Topix index, which includes all shares on the exchange's first section, lost 14.64 points, or 0.94 percent, to 1,538.37 points Tuesday.

In currencies, the U.S. dollar bought 116.03 yen on the Tokyo foreign exchange market at 11 a.m. Tuesday, down from 116.08 yen late Monday in New York. The euro rose to $1.3140, from $1.3128.

The yield on Japan's 10-year government bond was 1.6550 percent, down from Monday's finish of 1.6600 percent. The price rose to 101.22, from 101.18.