Tokyo, Jan 20 (IANS): Tokyo stocks plummeted on Wednesday as a continued decline in oil prices, the yen's rise against the US dollar and concerns for the global economic outlook saw investors offload a swathe of issues amid a risk-off mood.
The benchmark Nikkei fell more than three percent to its lowest close in 15 months, as the continued oil glut saw energy-linked shares sold and investors switching out of major blue chips here and away from the market's key exporter issues, which are highly susceptible to yen fluctuations.
At the close, the 225-issue Nikkei Stock Average fell 632.18 points, or 3.71 percent, from Tuesday to 16,416.19, marking its lowest closing level this year.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, dropped 51.44 points, or 3.70 percent, to end the day at 1,338.97.
Local analysts said markets may continue to be pressured as long as oil prices remain low.
"At the root of the selling, we've seen this year has been the imbalance of oil supply and demand, so till the oil price moves calm down, the stock market will struggle," Chihiro Ohta, general manager of investment information at SMBC Nikko Securities, was quoted as saying.
"We'll continue to see a tug-of-war between nervous sentiment and technical indicators showing that falls have gone too far," Ohta added.
In addition, market players said the International Monetary Fund downgrading its global growth forecast for 2016 did little to improve sentiment and contributed to the yen's rise against its US counterpart.
A strong yen impacts export-related stocks as profits made overseas are reduced when funds are repatriated.
Trading volume on the main section rose to 2,566.22 million shares from Tuesday's 2,173.18 million shares.
On the main section all categories lost ground, with mining, marine transportation and real estate-linked shares comprising the biggest decliners.
Declining issues outnumbered advancing ones by 1,886 to 40. The day's turnover was 2,672.5 billion yen ($22.86 billion).