They're All Connected

The world's financial markets are so intertwined that when one itches, the others scratch. As mounting concerns over Japan's reeling economy sent Tokyo's stock exchanges into a dizzying vortex last week, markets from Amsterdam to Zurich did some rocking and rolling of their own. Tokyo's Nikkei average sank to 15,498 points, its lowest level in more than six years, while the London stock exchange fell 2.3% and Frankfurt shares dropped 5.4%. New York's Big Board sank 46 points, or 1.4%, in a week of generally bearish trading.

The Tokyo markets, which have plummeted 30% since January, staged a brief comeback Thursday. They were encouraged by the launching of the new Securities and Exchange Surveillance Commission, Japan's first regulatory agency for stock exchanges, and the news that Japanese Premier Kiichi Miyazawa would convene a special Cabinet session. The Nikkei resumed its steep downward slide Friday, however, after Finance Minister Tsutomu Hata said it would be difficult to bolster the market. Business leaders have urged the government to take steps to prop up the market. Miyazawa, however, is banking on a supplementary budget to stimulate the economy, but few economists believe the government alone can revive the market.

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CAPTION: Japan's Nikkei Index