Japan's Nikkei 225 has fallen 61.8% from a high of 18,300.39 in February 2007 to a low of 6,994.90 in October 2008. In the process, the market capitalization of the Tokyo Stock Exchange's (TSE's) first, second and Mothers markets has imploded by JPY311.29 trillion ($3.2 trillion), to JPY266.8 trillion from a peak of JPY578.09 trillion in June 2007. The price-to-book ratio for all companies listed on the TSE 1 has continued to trend under 1.0X, and is still at 0.93 even after the recent rally, while the P/E multiple for the entire first section has soared from a mere 10.6X trailing earnings to a massive 111.9X forward earnings, and the earnings yield has imploded from 9.41% trailing to 0.89% forward earnings. In Q4 alone, the Nikkei estimated that the entire exchange-listed manufacturing sector was losing a massive JPY4 trillion ($41 billion) at the recurring profit level.


The Tokyo Stock Exchange said Wednesday that 20 of its listed companies were short of minimum market capitalizations required for listing as of Tuesday or the end of fiscal 2008, up from three a year earlier, despite eased requirements in the face of falling stock prices. The 20 companies -- Hoosiers Corp. listed on the First Section, eight firms on the Second Section and 11 on the Mothers market for start-ups -- will be de-listed if they fail to bring their market capitalizations back to the required levels during a nine-month grace period, the TSE said.

As an emergency step to deal with the recent plunges in stock prices, the Tokyo exchange has lowered the minimum amounts of required market capitalization, such as from JPY1 billion to JPY600 million yen for companies on the First Section since January. As of Tuesday, 1,719 companies were listed on the First Section, 457 on the Second Section and 194 on the Mothers market.