Japanese shares at 16-year low point

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The Independent Online

Japanese share prices plunged more than 3 per cent yesterday, to their lowest level for 16 yearswhile the yen fell to its weakest against the dollar for nearly two years, amid fresh evidence of political turmoil and economic stagnation.

Japanese share prices plunged more than 3 per cent yesterday, to their lowest level for 16 yearswhile the yen fell to its weakest against the dollar for nearly two years, amid fresh evidence of political turmoil and economic stagnation.

New figures showed that Japan's economy had bucked expectations by expanding in the fourth quarter of last year. But the 0.8 per cent rise in GDP masked an alarming drop in consumer spending and stagnant exports. The expansion only served to highlight the dismal prospects for 2001.

"All the forward-looking indicators suggest this is as good as it's going to get," said Russell Jones, head of currency research at Lehman Brothers.

The Nikkei reacted by falling 456.53 to 12,171.37 yesterday. The yen fell to a 20-month low of ¥120.42 to the dollar.

Taro Aso, the economics minister, said the government's growth target of 1.2 per cent would be met. "The biggest problem is that personal spending, which makes up 60 per cent of the economy, is negative," he said.

Yesterday's figures showed consumer spending dropped 0.6 per cent during the final quarter of 2000, after staying flat the previous quarter. Imports were up 4.5 per cent and exports rose 0.6 per cent.

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