TOKYO: Japan's Nikkei stock index fell to a three-week low on Thursday, as investors fretted over prospects of faster US monetary tightening, the war in Ukraine and COVID-19 lockdowns in China.
The Nikkei had dropped 2% to 26,803.34 by the midday break and was on course for its worst session since March 11, with chipmakers and auto companies among the worst performers. Of the benchmark's 225 components, 195 stocks fell versus 30 that gained.
"A lot of uncertainty is still swirling around external events," including the Federal Reserve and the Ukraine conflict, said a trader at a domestic securities firm. "It's difficult for stocks to recover in such an environment."
Overnight, Wall Street slid after minutes of the Fed's March meeting showed deepening concern among policymakers that inflation had broadened through the economy, with many of them advocating bigger rate hikes. Meanwhile, the United States imposed more sanctions on Moscow as Russian forces bombarded Ukrainian cities, while Shanghai extended a strict citywide lockdown to fight a COVID outbreak.
Japanese shares fall on slowdown worries after hawkish Fed comments
Japan's broader Topix fell 2% to 1,884.41. Pharma was the only one among the Tokyo Stock Exchange's 33 sub-sectors to rise, adding 1.48%.
The sector was led higher by Astellas Pharma, which was also the Nikkei's biggest percentage gainer with a 4.53% rally after Jefferies reiterated its "outperform" rating for the stock. Among losers, Honda was the biggest percentage decliner, dropping 5.56% after Mizuho downgraded the stock to "hold" and lowered its price target.
Toyota slipped 1.69% and Nissan lost 2.26%. Chip giant Tokyo Electron fell 4.75% to be the biggest drag on the Nikkei by index points, tracking a decline in US peers overnight.
Advantest slumped 5.33%. Uniqlo store operator Fast Retailing also stood out with a 3.2% slide, while startup investor SoftBank Group shed 2.44%. Sony retreated 3.42%.
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