Japan’s Nikkei sinks 2% as tech stocks track Wall Street slide

TOKYO: Japan’s Nikkei share average fell more than 2% on Monday, with technology stocks among the biggest decliners, tracking heavy losses among Wall Street peers in the previous session.

The Nikkei was down 2.14% at 35,613.32, as of the midday break, dropping below the psychologically key mark of 36,000 for the first time since Aug. 13. At one point, the benchmark plunged as much as 3.14%.

Semiconductor-sector stocks led the list of biggest Nikkei decliners, with chip-testing equipment maker Lasertec dropping the most after a 7.57% tumble, and followed by chipmaker Renesas Electronics’ 6.68% dive.

The broader Topix lost nearly 2%.

Japanese shares were also weighed down by a stronger yen, which rallied on Friday amid demand for safe havens as equities tumbled, after monthly US payrolls figures confirmed the jobs market was losing momentum.

“The results of the employment report, despite not revealing a sudden worsening of the US economy, left traders feeling deeply uncertain about the outlook,” said Maki Sawada, an equities strategist at Nomura Securities.

However, Sawada said Nikkei selling may have run its course, considering the healthy earnings outlook and a 5.8% tumble for the index already last week.

Japan’s Nikkei rises as tech shares gain

“Unless the yen strengthens beyond 142, the Nikkei is more likely to pare losses than deepen them,” she said. The yen last traded at 142.80 per dollar, but had rallied as far as 141.75 on Friday for the first time in more than a month.

The overall firmness of the currency weighed on exporters, particularly automakers.

Transport equipment dropped more than 4% to be the worst performer among the Tokyo Stock Exchange’s 33 industry groupings, all of which were down on the day.

One bright spot was takeover-target Seven & i Holdings, whose 2.62% rally put it among the Nikkei’s best performers.

Canadian rival Alimentation Couche-Tard said on Sunday it was willing to engage in confidential discussions with the company, after its initial $38.5 billion buyout offer was rejected.