Top > Business > 2006 > July > 2006-07-07

Japan Index Falls Amidst Security Concerns

On Thursday, Japanese stocks fell for the second straight day as a result of security concerns stemming from the launches by Stalinist North Korea of six mid-range missiles and one launch ? deemed a failure by the U.S. ? of a long-range Taepodong-2 missile. The Nikkei index fell 1.30 percent, or 202.54 points, finishing at 15,321.40 points on Thursday. On Wednesday, a day after the launches, the Nikkei fell .73 percent in Tokyo. The United States, Japan, and South Korea had issued stern warnings to Pyongyang not to launch, but as America celebrated its 230th birthday the dictatorship thumbed its nose at regional and worldwide foes alike.

The Taepodong-2, which is very similar to a Shihab-series missile in the Islamic Republic of Iran, was previously believed to have a range that would allow it to hit portions of the Western United States. Prior to the launch of the Taepodong-2 on Tuesday, the United States had activated anti-ballistic missile batteries in the state of California. Fortunately, no test of the American missile defense shield was necessary, as 40 seconds after the launch it was apparent that the missile would likely fail to meet any distance standards.

Back in Japan, the country?s central back is set to meet on July 13-14, and it is widely expected that interest rates will see a rise as a result. Despites concerns over North Korea, Bank of Japan Governor Toshihiko Fukui told Japanese central bank members that ?The economy will likely expand based on a favorable economic recovery cycle led by production, income and expenditure.? On the Tokyo foreign exchange, the dollar-yen exchange rate stood at 115.48 Japanese yen to the U.S. dollar.