Money World economy
Tokyo shares fell three percent in afternoon trade Tuesday, with the Nikkei index shedding 276.73 points to 8,872.53 as a persistently strong yen hit exporters.
Despite new economic measures from financial authorities, a high yen and a slide on Wall Street conspired to keep worries over the health of the global economy at the forefront of investors' minds.
The heavy losses more than wiped out Monday's gains made before the Bank of Japan announced an expansion of its monetary easing programme and the government gave a broad outline of its fresh stimulus plans.
On Tuesday the yen surged to 84.27 to the dollar, up from 85.36 yen on Monday afternoon despite the BoJ announcement on its actions aimed at lowering the value of the Japanese currency.
"Japan is giving investors the impression that it's running out of options to counter market weakness," Kenichi Hirano, strategist at Tachibana Securities, told Dow Jones Newswires.
Japanese authorities have attempted, but failed, to contain the yen's steady appreciation, which hurts exporters by making their products relatively more expensive overseas while making imports cheaper, fuelling deflation. A strong yen also reduces the value of overseas earnings of Japanese firms when repatriated into the Japanese unit.
