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Record bank falls sink Japan to new low

By Alex Frew McMillan

This is the lowest close for the Nikkei since August 1983, as bank stocks plummeted

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HONG KONG, China (CNN) -- Japan's stock market fell again on Thursday, setting fresh 19-year lows.

The Nikkei 225 average dropped 1.25 percent to 8,936.43, closing under the 9,000 mark for the first time since August 1983.

The broader Topix lagged 1.08 percent to 883.59, with record falls in large-cap financial issues.

Most other Asian markets also moved lower, with Taiwan surrendering more than 2 percent to an 11-month low.

Coincidentally, Hong Kong's Hang Seng also ended below its own 9,000 mark to a one-year low.

New Zealand also fell, with Singapore slightly down at the close. But Australian equities managed a tiny gain.

South Korea's stock market was closed for Korea's National Foundation Day holiday.

Mizuho, UFJ down record amount

In Japan, Mizuho Holdings plunged 15.75 percent to 214,000 yen. UFJ Holdings collapsed 14.87 percent to 229,000 yen.

Those were record one-day losses for both banks.

Investors were reacting to the prospect that the government will impose harsh measures to tackle the bad-loan problem with Japan's banks, estimated by some at $400 billion.

The Financial Services Agency announced the members of a task force formed by new financial services minister Heizo Takenaka.

They include Takeshi Kimura, president of KPMG Financial in Japan, who is known to favor taking a hard line with the banks.

He has pushed for pumping taxpayer money into the weakest banks and seizing banks that don't meet capital requirements. He is also likely to push banks to let problem clients go bankrupt.

The panel, headed by Yutaka Kosai, chairman of the Japan Center for Economic Research, will meet for the first time on Thursday night and is expected to generate a report this month.

There are suggestions the government may postpone an April 2003 deadline to put in a 10 million yen cap on government bank deposits.

Troubled borrowers down

Troubled retailer Daiei, struggling under $17 billion in debt, plummeted 14.97 percent to 125 yen on the prospect of a tougher line from its creditors.

Trading house Marubeni Corp. dropped 8.76 percent to 125 yen, with problem borrowers likely to face a tougher stance.

Mitsubishi Electric, one of a few gainers on Wednesday, gave way to the selling on Thursday, dropping 6.4 percent to 366 yen.

NTT DoCoMo gained 3.41 percent to 212,000 yen one day after announcing $4.7 billion in writeoffs in its telecom holdings overseas. (Full story)

It said it may still post a first-half profit despite the writedowns.

The yen is trading slightly stronger at 122.82. But car companies held up, Toyota Motor rising 1.33 percent to 3,040 yen and Honda Motor climbing 0.41 percent to 4,880 yen.

Taiwan off the most in Asia

Wall Street couldn't sustain its strong run of the day before, the Dow Jones industrial average falling 2.3 percent on Wednesday and Nasdaq off 2.2 percent. (Full roundup)

In Taiwan on Thursday, the Taiex fell 2.3 percent to 4,075.98, the heaviest selling in Asia. That's its lowest close since November 2001.

Chip foundry TSMC lurched 5.75 percent lower to T$37.70, deepening the fall in its New York listing.

UMC dropped the daily 7 percent limit for a move in Taiwan, to T$21.30, outdoing a 5.5 percent fall in its U.S. listing.

Chip stocks were lower after a warning from Advanced Micro Devices during U.S. trade.

Its partner VIA Technologies dropped the 7 percent limit to T$43.90, its lowest this year.

Nanya Technologies climbed 2.38 percent to T$21.50, one of the few gainers. After the close Wednesday, it forecast profits would rise 46 percent in 2003.

Australia slightly up

Australia's S&P/ASX 200 index climbed 0.04 percent to 2,999.3, with retailer Coles Myer up 5.1 percent to A$6.43.

The company posted a net profit of A$353.8 million and said it believed the worst was behind for its department-store division. (Full story)

News Corp. climbed 1.3 percent to A$9.19, still enjoying warm sentiment after winning its bid for Italian pay-TV company Telepiu.

Banks were generally higher, ANZ gaining 0.8 percent to A$18.28 and Westpac up 0.9 percent to A$14.23.

Gold stocks were up as bullion rose, with Lihir Gold up 3.2 percent to A$1.30.

In Wellington, New Zealand's Top 40 fell 0.26 percent to 1,986.15. Telecom New Zealand fell 0.20 percent to NZ$4.96 as Verizon finished selling most of its 21.5 percent stake.

Hang Seng closes under 9,000

Hong Kong's Hang Seng index dropped 1.37 percent to 8,984.32, its lowest level in a year.

Hutchison Whampoa fell to HK$42.00, a four-year low, after NTT DoCoMo wrote down its stake in its European 3G cell-pone operations. (Full story)

Hutch says it disagrees with DoCoMo's math on the writedown. (Full story)

A ports lockout on the West Coast of the United States is disrupting Asian trade to a major market. Some economists suggest an extended work stoppage could throw Asia back into recession.

Trading house Li & Fung, a major shipper to the United States, dropped 6.1 percent to HK$6.95. Small-motor maker Johnson Electric dropped 6.2 percent to HK$7.55.

Bank stock HSBC fell 1.55 percent to HK$79.50.

Preliminary data showed that Singapore's Straits Times index closed down 0.25 percent at 1,351.98.

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