Japan hits 16 year low forcing Asia sell off

HONG KONG, China -- Japanese stocks crunched sharply lower on technology selling Monday morning, putting heavy pressure on markets throughout Asia.

Tokyo's benchmark Nikkei index sagged 2 percent to a 16-year low by lunchtime Monday. It ended the morning trading session at 11,491.30, off 243.76 points.

Monday's low was its weakest point since May 1984, when the Nikkei hit 11,340.05.

The central Bank of Japan is meeting Monday, facing government pressure to help Japan's economy. But the BOJ is not expected to change monetary policy.

The broader Topix was down 1.4 percent at the break, at 1,165.82.

Chip stocks under pressure

VIDEO CNN's Lisa Barron with Asian stock market update.( August 13 ) Play video (QuickTime, Real or Windows Media)

Advantest Corp., Japan's largest chip-testing device maker, was down 6.0 percent to 7,950 yen, after warning on profits late last week.

Chip maker Rohm was also under pressure after a profit warning. It was down more than the daily limit, off 11.4 percent at 175,000 yen. That means investors can only buy the stock.

The selling was depressing tech stocks, particularly other chip makers such as Kyocera Corp. Kyocera was down the daily limit, giving up 10.7 percent to 8,330 yen.

In Australia, the benchmark S&P ASX 200 index was down 0.4 percent at 3,389.4 in afternoon trade.

The Reserve Bank of Australia suggested in its quarterly statement that there was no need to cut rates further at the moment.

In Seoul, South Korea's benchmark Kospi was off 0.1 percent by noon, at 554.83. Earlier in the day it had gains.

But Samsung Electronics was up. The world memory chip No. 1, and South Korea's largest stock, rose 1.3 percent to 189,000 won.

Taiwan stocks were up 1.1 percent by early afternoon, with the Taiex at 4,524.28. Bank stocks were leading the gains after officials moved to bolster the sector.