Japanese shares fall on tech sell-off as Fed signals earlier rate hikes

TOKYO: Japanese shares fell on Thursday as investors sold off heavyweight technology stocks following Wall Street's weak finish overnight after the US Federal Reserve signalled rate hikes earlier than expected.

The Nikkei share average fell 1.3% to 28,911.01 by 0205 GMT, while the broader Topix lost 0.77% to 1,960.63.

The three main Wall Street indexes all fell overnight after the Fed revealed it expected its first post-pandemic interest rate hike to come in 2023, a year sooner, citing an improved health situation amid the vaccine rollout.

"Investors seems to be overreacting to the Fed's announcement, and the declines in US stocks," said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

"But it is understandable, because the US market may fall again tonight as the market might not have fully digested the Fed's announcement, which was made right before the close."

Tech start-up investor SoftBank Group slipped 2.01%, while chip-related stocks Advantest fell 3.4% and Tokyo Electron lost 0.78%. Murata Manufacturing fell 2.77% and Sony Group fell 2.15%.

Financial firms advanced as US Treasury yields rose.

Insurers T&D Holdings and Dai-ichi Life Holdings were top gainers on the Nikkei, rising 3.72% and 3.13%, respectively.

Mitsubishi UFJ Financial Group added 1.28% and Sumitomo Mitsui Financial Group gained 1.04%.

Toshiba, which is facing corporate governance crisis, added 1.05% after the Wall Street Journal reported its chairman said he may step down after revamping its board and appointing a new CEO.

There were 54 advancers on the Nikkei index against 170 decliners.