Nomura's shares fell by 100 to 1,370, about 700p, making a 13 per cent drop since last Thursday when it announced that two directors illegally funnelled trading profits to a company linked to a racketeer.
At least 10 institutional investors have suspended business with Nomura since the scandal, and the company's president, Hideo Sakamaki, has indicated that he will probably resign within the next few weeks.
The Japanese government's Pension Fund Association has pronounced Nomura unworthy of trading on its behalf. Among the other companies which have suspended their business are Dai-Ichi Mutual Life Insurance Co, the Long Term Credit Bank of Japan, Sumitomo Trust and Banking, and Mitsui Trust and Banking. Even the US subsidiary, Nomura Investment Management, has stopped business with its parent company in Tokyo, as has Calpers, the California Public Employees Retirement System.
According to BZW Securities (Japan) yesterday the flight of its clients could cost Nomura as much as 50bn in lost revenues from trading commissions and underwriting new securities. "It could take several years for the ground lost to be recovered," said David Threadgold, BZW's analyst in Tokyo.
The scandal, and the ensuing losses, come at a time of increasing uncertainty in Japanese finance, as the government embarks on a long-awaited programme of deregulation intended to improve competitiveness - Japan's so-called "Big Bang".
According to Ayako Sato, of UBS Securities, a change of management in Nomura "may delay efforts to devise effective Big Bang counter-measures".
On Monday, two managing directors of Nomura resigned. Yesterday, executives of a second Japanese company were arrested on charges that they paid large sums to a so-called sokaiya - a gangster.