- The Nikkei share average slipped 0.47% to 28,234.09 by 0209 GMT, while the broader Topix was down 0.20% to 1,933.77
TOKYO: Japanese shares fell on Thursday, as the country's plan to reintroduce a state of emergency to contain a resurgence of COVID-19 infections stoked worries about an economic slowdown.
The Nikkei share average slipped 0.47% to 28,234.09 by 0209 GMT, while the broader Topix was down 0.20% to 1,933.77.
Japan is set to declare its fourth state of emergency for Tokyo that will run through its hosting of the Olympics, a key minister said, as organisers consider banning all spectators from the Games.
The Tokyo area is currently under slightly less strict "quasi emergency" curbs. Under the heightened restrictions, restaurants will be asked to stop serving alcohol, economy minister Yasutoshi Nishimura said.
"The reintroduction of state of emergency is one reason that investors are hesitant to buy Japanese stocks," said Shigetoshi Kamada, general manager for the research department of Tachibana Securities.
"But in the first place, foreign investors' priority on Japan is low, because in a macro view, the pace of its growth is lagging behind the United States and Europe. Its vaccination rate is also lower than those countries."
Energy resources explorers and airlines led the decline among the Tokyo bourse's 33 sectoral sub-indexes.
Retailers also fell, with Isetan Mitsukoshi Holdings and Marui Group down 1.95% and 1.89%, respectively.
Showa Denko slipped 1.56% after a report said the materials maker planned to sell its underperforming lead-acid battery operations to Japanese private equity fund Advantage Partners.
Super market operator Aeon jumped 1.97% after saying it returned to profitability in the latest quarter with a 39 billion yen operating profit.
Daikin Industries jumped 4.3% after the Nikkei business daily reported the air conditioner maker had developed a refrigerant for electric vehicles that could extend their range by up to 50%.