The Nikkei 225 stock dropped to a nine months low with the fall in stocks in Japan with the prevailing sluggish economic conditions.  

Japan’s Prime Minister Naoto Kan yesterday indicated the government is considering additional stimulus measures. His administration is facing pressure to safeguard the nation’s recovery after figures yesterday showed the economy expanded at a less-than-estimated annualized 0.4 percent pace in the second quarter. China has eclipsed Japan as the second-largest economy.

Naoto Kan the Prime Minister of Japan hinted that there is a proposal to provide additional support by his government to sustain the economic revival. After the recent index showing less than the forecasted economic growth of
0.4% annually, his government is under tremendous pressure to provide security to the country’s economy. China has surpassed Japan to become the world’s 2nd largest economy.

Tokyo headquartered Chuo Mitsui Asset Management Co.’s general manager for its investment unit Naoteru Teraoka said that they are not sure of the measures to be taken by the government to revive the economy and yen.  He added that the investors are not able to plan their investments with the continued anxiety over the economic changes.

Out of 33 industry segments listed in Topix index, only two showed some upward movement while the rest had a fall. Banks were the worst affected with Sumitomo Mitsui Financial Group Inc. going down by 1.2% and Mitsubishi UFJ Financial Group Inc. weakened by one percent.

“The Japanese government’s considering economic stimulus measures means that they’re admitting the economy is weak,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “It’s not a good environment to buy stocks.”

Fumiyuki Nakanishi associated with SMBC Friend Securities Co. as a strategist stated that the very fact that the government is proposing incentives for economic revival substantiates the acceptance of the government of a not so strong economy.