Nikkei fall continues on global uneasiness

Japanese stocks fell further Thursday amid global jitters over the U.S. subprime loan crisis and broader concerns about the U.S. economy.

The key Nikkei 225 index fell 327.12 points, or 1.99 percent, to close at 16,148.49 Thursday on the Tokyo Stock Exchange.

Tokyo stocks were dragged down after Wall Street tumbled again overnight. The Federal Reserve added more cash to the U.S. banking system Wednesday but failed to quash investors' jitters about problems in lending.

Thursday morning, the Bank of Japan injected ¥400 billion into local money markets, the third time since Aug. 10 that it has acted in a bid to curb rises in a key overnight interest rate.

Tokyo stocks retreated broadly despite the move. The Nikkei at one point fell below 16,000 — a more-than 3 percent drop — for the first time since the end of last November before bargain-hunting helped stem the losses.

Analysts said the Nikkei appeared oversold.

"The problems we are seeing right now are being driven by short-term players who need to cut positions," said Yoichi Nagae, chief portfolio manager at Nissay Asset Management. "If you look at the forward (earnings estimates), Japanese stocks are cheap."

Steel, shipping and oil stocks fell, as did exporters hurt by the yen's strengthening against the dollar.