TOKYO: Japanese shares fell on Wednesday, tracking Wall Street's slide overnight as traders were worried about the impact of potential aggressive Federal Reserve actions on economic growth.
By 0159 GMT, the Nikkei share average had lost 2% to 27,219.69 and was on course for its biggest daily fall in nearly four weeks.
The broader Topix slipped 1.52% to 1,919.50.
Wall Street's main indexes fell overnight, dragged down by tech and other growth stocks, after Fed Governor Lael Brainard said she expected rapid reductions to the central bank's balance sheet alongside increases to the benchmark interest rate.
"Brainard's remarks hit investor sentiment, and the overnight decline in Nasdaq prompted a sell-off in technology stocks today," said Takatoshi Itoshima, a strategist at Pictet Asset Management.
"But overall, the Japanese market is relatively cheap, so I expect some demand for buying stocks at a decline."
Chip-making equipment maker Tokyo Electron dragged down the Nikkei the most, falling 3.83%, followed by technology investor SoftBank Group, which fell 3.27%.
Advantest , another chip giant, lost 4.44%.
Refiners climbed 2.43% and the sector was one of the two trading in positive territory among the Tokyo Stock Exchange's 33 industry sub-indexes, along with banking.
Cosmo Energy Holdings surged 14.88% after a fund backed by activist investor Yoshiaki Murakami obtained a 5.81% stake in the crude oil importer and refiner.
Tokyo stocks open higher tracking US gains
Peers Idemitsu Kosan rose 3.64% and Eneos Holdings gained 0.64%.
The volume of shares traded on the Tokyo Stock Exchange's main board was 0.51 billion, compared with the average 1.29 billion in the past 30 days.
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