TOKYO: Japan’s Nikkei share average tumbled on Wednesday to its first loss in four days as a stronger yen and fears of a US recession hit auto and energy stocks.
The Nikkei extended declines in the afternoon session to end down 1.68% at 27,813.26, plunging below the psychological 28,000 mark for the first time this month.
It had rallied 1.82% over the previous three sessions to touch the highest since March 10.
The broader Topix slid 1.92% to 1,983.84, following a three-day gain of 1.99%.
Shares that had rallied in recent days were sold by investors looking to lock in profits, with energy stocks among the worst-hit.
The yen extended its rally to as strong as 131.315 per dollar, weighing on sentiment broadly, and slapping down automakers in particular, as it cut the value of overseas sales. Toyota Motor Corp dropped 2.45%, Honda Motor Co Ltd sank 2.23% and Mazda Motor tumbled 3.33%.
Overnight, all three major US stock indexes declined, as evidence of a cooling economy exacerbated worries that the Federal Reserve’s rate tightening campaign may trigger a deep downturn.
New data showed job openings dropped to the lowest in two years, and factory orders fell for a second month.
“Rising concern over the US economy and the decline in US stocks are having a big impact,” said Maki Sawada, a strategist at Nomura Securities, noting that economically-sensitive sectors such as energy and steel were being particularly hard hit.
Tokyo stocks end higher after US rallies
“Given the Nikkei’s rise in recent sessions, some profit taking is natural.”
Fast Retailing was the biggest drag on the Nikkei, dropping 1.92% and erasing 58 index points from the index. Oil and coal producers lost 3.11% and iron and steel sank 3.16%, making them the worst-performing industry sectors on the Tokyo Stock Exchange.
Shipping alone rose, climbing 1.13% and continuing its strong rebound from the two-month low hit on Monday.
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