Japan’s Nikkei share average fell more than 2 per cent to end at a six-month low on Friday (Mar 7) as technology stocks tracked Wall Street declines and a stronger yen weighed on exporters.
The Nikkei closed down 2.17 per cent at 36,887.17, its lowest close since Sep18, after touching 36,813.62 during the session, also its lowest intraday level since that day.
The index lost 7.5 per cent so far this year to become the second-worst performer among major Asian markets.
The broader Topix slipped 1.56 per cent to 2,708.59.
Wall Street stocks finished lower overnight, with the Nasdaq confirming it has been in a correction since December on the uncertainty surrounding US trade policy.
The Nasdaq has fallen 10.4 per cent from a record-high close on Dec 16. An index of chipmakers dropped 4.5 per cent on Thursday.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“We saw some negative cues for Japanese shares, including overnight declines in US stocks and a stronger yen,” said Kentaro Hayashi, a senior strategist at Daiwa Securities.
Uniqlo-brand owner Fast Retailing slipped 3.64 per cent to drag the Nikkei the most, while chip-related Tokyo Electron and Advantest lost 3 per cent and 2.34 per cent, respectively.
Automakers also fell after the yen strengthened against the dollar amid safe-haven bets.
Toyota Motor and Honda Motor lost 0.69 per cent and 0.56 per cent, respectively.
A stronger Japanese currency tends to hurt shares of exporters, as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
Renewed expectations for the Bank of Japan’s interest hikes weighed on sentiment after the market saw signs of strong wage growth, said Naoki Fujiwara, a senior fund manager at Shinkin Asset Management.
Japan’s largest labour union umbrella group, Rengo, is seeing its member unions demand the biggest salary increase in over 30 years. Wages are seen as a key gauge for the BOJ’s rate path.
Of the more than 1,600 shares trading on the Tokyo Stock Exchange’s prime market, 28 per cent rose, 69 per cent fell and 2 per cent traded flat. REUTERS
