Japanese stocks fall on economic growth worries

Japan's benchmark index dipped below the 9,000 mark on Thursday (August 18th), with investors' confidence damaged by economic uncertainty in Europe and the US.

The Nikkei average fell for the second straight day to reach 8,943.76 - its lowest close since markets reacted to the country's devastating earthquake and tsunami in March, AFP reports.

Fears that the US could be heading for another recession, as well as the strength of the yen and ongoing concerns about the situation in the eurozone, have been blamed for the Tokyo index's latest falls.

"There is risk reduction being seen among foreign investors, with currency levels (the yen) showing elevated levels," Mattia Ciancaleoni, director of equity sales at Citigroup, told Reuters.

The meeting between German chancellor Angela Merkel and French president Nicolas Sarkozy earlier this week largely failed to ease worries about Europe's sovereign debt problems.

Although the two leaders called for the closer integration of economic policy across the eurozone, they did not propose increasing the size of the stability fund or back the issuing of so-called euro bonds.