The Nikkei Stock Average ended down 699.50 points, at 27,448.01, the Topix index of all First Section issues on the Tokyo Stock Exchange closed 28.91 points, lower at 1,849.04
Tokyo’s Nikkei stock index dropped for the third straight day Thursday to close at its lowest level in four months on rising concerns over U.S. inflation and the continued spread of coronavirus variants in Japan.
The 225-issue Nikkei Stock Average ended down 699.50 points, or 2.49 percent, from Wednesday at 27,448.01, its lowest finish since Jan. 6. The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed 28.91 points, or 1.54 percent, lower at 1,849.04.
Decliners were led by precision instrument, information and communication and electric appliance issues.
The U.S. dollar hovered in the upper 109 yen range, as buying on expectations for a wider interest rate gap between the United States and Japan was offset by selling to lock in gains after the U.S. unit rose overnight to its highest level in a month, dealers said.
After the Nikkei dropped nearly 5 percent in the previous two sessions, shares continued to fall throughout the day, as strong U.S. consumer price data fuelled inflation fears and concern the Federal Reserve will be forced to bring forward monetary stimulus tapering, brokers said.
The Tokyo market inherited the momentum from Wall Street where investors worried inflation will push U.S. long-term interest rates higher and diminish the value of stocks, especially technology issues that had led market prices higher, said Koichi Fujishiro, a senior economist at the Dai-ichi Life Research Institute.
As for an individual factor for Tokyo, there is also concern about slower progress in coronavirus vaccinations, he said. Japan lags behind other advanced countries in its vaccine rollout amid a continued rise in infections with the spread of more contagious variants.
On the First Section, declining issues outnumbered advancers 1,800 to 335, while 57 finished unchanged.
Nikkei heavyweight SoftBank Group slumped 713 yen, or 7.8 percent, to 8,467 yen on expectations the investment and technology conglomerate will be hit by weaker stock markets.
Among tech shares, semiconductor equipment maker Tokyo Electron sagged 2,180 yen, or 4.7 percent, to 44,300 yen and electronics maker Sony Group declined 311 yen, or 3.0 percent, to 9,989 yen.
Trading volume on the main section dropped to 1,408.35 million shares from Wednesday’s 1,529.39 million shares.