31 August 2010 Last updated at 03:49 ET

Japanese stocks drop 3.5% on yen fears

Nikkei 225 Index

Last Updated at 10 Feb 2012, 01:45 ET

value	change	%
8947.17	- -55.07	- -0.61

Japanese stocks have seen sharp falls in response to the Bank of Japan's attempts to curb the rising yen.

In Tokyo, the Nikkei 225 index fell more than 3.5%, hitting a fresh 16-month low.

On Monday, Japan's central bank announced plans to boost low-interest lending, in an effort to bring down the value of the currency.

But the yen remains at 15-year highs and investors are concerned over the impact that could have on exporters.

A strong yen makes Japanese goods more expensive abroad, hitting exporters' profits.

Electronics giant Sony was hit by the sell-off, losing 3.66% of its share price.

'Tokenistic gesture'

Car maker Toyota was down nearly 2.4%, while Toshiba lost 4.7%.

The Bank of Japan said it would boost cheap lending to commercial banks by 10 trillion yen ($117bn; £75bn), in an attempt to ease pressure on the yen.

The Japanese government also said it would initiate a further 920 billion yen of stimulus measures.

But BBC Tokyo correspondent Roland Buerk said the move had been seen as a "tokenistic gesture" by investors.

"Government ministers here have been trying to talk down the yen," he said.

"They have said they will take decisive action, [but] the problem is that the limited action they have taken so far has looked anything but decisive."