TOKYO: Japanese shares posted their biggest drop in four months on Monday, tracking Wall Street’s sell-off last week, triggered by fresh comments from a Federal Reserve official that the US central bank might raise interest rates sooner than expected.
Heavy selling in Japan was seen across almost sectors, with all the Tokyo Stock Exchange’s 33 industry sub-indexes, except airlines, trading lower.
The Nikkei share average lost 3.29% in its biggest percentage fall since Feb. 26, to close at 28,010.93, after touching its lowest in a month. The broader Topix slipped 2.42% to 1,899.45, also its biggest decline in four months.
Index heavyweights slumped, with Uniqlo owner Fast Retailing losing 4.35%.
Tech start-up investor SoftBank Group lost 3.51% after the Wall Street Journal reported that Chief Executive Masayoshi Son dissolved his long-standing personal lending with Credit Suisse.
Chip-related shares also dragged the Nikkei lower, with Tokyo Electron losing 4.02%, Advantest falling 4.49%, and Shin-Etsu Chemical tanking 5.74%.
Japanese corporate giants are joining the nation’s Covid-19 vaccination campaign ahead of the Olympic Games. Toyota Motor to telecom giant SoftBank Group are setting up clinics in a massive private-sector vaccination drive, which will begin on Monday.
“The Japanese market is reacting too much. First of all, rate hikes are signs of an economic recovery,” Shuji Hosoi, senior strategist at Daiwa Securities, said.
“But Japan needs to find its own consistent reason for a market rebound as Japanese companies are already speeding up vaccine rollouts for their employees. A steady vaccine rollout could be a major reason for an economic recovery.”
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