The Nikkei Stock Average plummeted to a 29-month closing low Wednesday as tumbling U.S. technology stocks and bleak data on Japan's economy dealt a double blow to the Tokyo equity market.
The benchmark 225-issue Nikkei index, which dropped 141.28 points Tuesday, slid a further 176.32 points -- or 1.35 percent -- to 12,883.54, marking its lowest close since Oct. 9, 1998.
The broader Tokyo Stock Price Index of all First Section issues sank 13.41 points, or 1.07 percent, to 1,241.48.
The Nikkei fell for a third trading day, the TOPIX for a second day.
The Nikkei's closing level Wednesday stands within a hair's breadth of its post-bubble closing low of 12,879.97, logged on Oct. 9, 1998.
The technology-heavy U.S. Nasdaq composite index plunged 100.68 points Tuesday to 2,207.82, marking its lowest close in 26 months, after a leading brokerage revised down earnings estimates for some 40 high-tech firms.
In Tokyo, the Ministry of Economy, Trade and Industry said shortly before the start of trading Wednesday that industrial production fell a seasonally adjusted 3.9 percent in January from the previous month.
The news provoked dismay among market players, as most had expected January's output to be around the same level as the previous month, brokers said.
The Nikkei's tumble came as the Bank of Japan was holding a closely watched meeting of its policy board. Later in the day, the board decided to slash its official discount rate by 0.1 point to 0.25 percent, and the target rate for overnight call money by 0.1 percent to 0.15 percent, effective today.
"Players apparently wanted to pressure the BOJ (to take an additional monetary easing step)," said Kazunori Jinnai, head of the equity department at Daiwa Securities SB Capital Markets Co.
Technology stocks were generally dumped, with Toshiba, NEC and Matsushita Communication Industrial slipping to new lows since the start of 2000.