Japan suffers biggest single-day stock drop for 20 years

Asia’s financial crisis deepened today after Japan’s Nikkei stock average fell almost 10% in its biggest single-day drop for more than 20 years.

The world’s second-biggest economy was also rocked by the collapse of an established life insurer: Yamato Life Insurance becomes the country’s first major victim of the US credit crunch.

The Nikkei, already reeling from a fall of almost 10% on Wednesday, shed 881 points, or 9.62%, to end the day at 8,276, its lowest close since May 2003.

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The index has fallen by an average of 24% this week, more than double the weekly losses seen in the aftermath of the 1987 stock market crash. The Nikkei has lost 46% this year and nearly a quarter of its value since last Friday.

“Selling is unstoppable in New York and Tokyo,” Yutaka Miura, a senior strategist at Shinko Securities, told the Associated Press. “Investors were gripped by fear.”

• A d v e r t i s e m e n t

On the final day of the Nikkei’s worst week in history, yet another orgy of selling was sparked by an overnight drop of 7.3% on the Dow Jones industrial average and news that Yamato, a 98-year-old life insurance firm, had become Japan’s first major financial firm to collapse as a result of the US credit crisis.

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