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TOKYO - JAPAN'S Nikkei stock index plunged seven per cent on Friday, dropping below the key 8,000 points level for the first time in more than five years on worries about weak corporate earnings.
Investors dumped stocks after the dollar sank to a 13-year low against the yen, adding to worries about the outlook for Japanese export earnings.
The Nikkei-225 index lost 602.18 points, or 7.12 per cent, to 7,858.80 in early afternoon trade, the lowest since May 2003.
Investors were also spooked by a profit warning from technology giant Sony whose shares dived more than 13 per cent.
The market largely ignored the Dow Jones' overnight rise on Wall Street.
'Wall Street closed higher overnight, but it was only a marginal gain after massive selling. The direction of global markets has not changed,' said Mr Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking.
Japanese companies rely heavily on overseas markets and a stronger yen can have a severe impact on their repatriated earnings.
Risk aversion continued to support the yen, particularly against higher-yielding currencies such as the euro, the Australian dollar and the British pound.
The dollar fell below 96 yen to hit the lowest level since August 1995 while the euro slipped below 122 yen.
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