Nikkei Posts Biggest Loss in 2 Months

[La_Serpiente]

Nikkei Posts Biggest Loss in 2 Months

TOKYO (Reuters) - Tokyo's Nikkei stock average slid two percent on Tuesday, its biggest one-day loss in two months, as investors dumped Advantest Corp and other tech issues given a souring outlook for the U.S. Nasdaq.

A halt in the dollar's rise also prompted investors to lock in profits in auto and other exporters, which had posted handsome gains on Monday after the dollar hit a three-month high of about 109.40 yen.

"Yesterday, there were hopes that the weaker dollar trend was over. But the dollar appears to be merely stabilizing at the 108-109 yen level today, putting a damper on that optimism," said Nobuki Goto, general manager of investment research at Tokio Marine Asset Management.

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Nikkei Posts Biggest Loss in 2 Months

[Art_from_Ark]

1. Profit-taking

A similar thing happened last October. Koizumi announced, a couple of weeks before the election, that the recession was over, so the Nikkei started rising. Then, after the election when people began having their doubts about the recession's demise, the Nikkei fell hard.

http://finance.yahoo.com/q/bc?s=^N225&t=6m

Note the spike in mid-October (when the announcement was made), and the low one month later (after the election)