TOKYO: Japan’s Nikkei share average hit a more than two-week low on Monday, after a bigger-than-expected US inflation spike in May sent Wall Street sharply lower on the weekend.

By 0219 GMT, the Nikkei index fell 2.8% to 27,042.99, its lowest level since May 27.

The broader Topix lost 2.14% to 1,901.55.

US stocks posted their biggest weekly drop since January on Friday and ended sharply lower on the day, as a steeper-than-expected rise in US consumer prices in May fuelled fears of more aggressive interest rate hikes by the Federal Reserve.

“Investors were concerned that ongoing inflation is more persistent than they had expected and global central banks would have to take tighter measures to contain it,” said Ikuo Mitsui, fund manager at Aizawa Securities.

Nikkei snaps five days of gains as US inflation data looms

The Nikkei, however, held on to the key psychological level of 27,000 in early trade on Monday.

“Japan has some positive cues and its fundamentals are relatively firm, with reopening of the economy and the weakened yen,” Mitsui said.

Chip-making equipment maker Tokyo Electron fell 3.93% and was the biggest drag on Nikkei, followed by technology investors SoftBank Group, which slipped 4.78%.

Air-conditioner maker Daikin Industries lost 3.85% and a robot maker Fanuc fell 3.8%.

Bucking the trend, Kansai Electric rose 3.26% and was the top gainer on Nikkei after the nuclear power plant operator said it would restart a reactor in August, two months ahead of its previous plan.

Department store chain Takashimaya rose 1.18% and rival Isetan Mitsukoshi Holdings gained 0.35%, as Japan eases restrictions on overseas travellers.

There were 16 advancers on the Nikkei index, against 205 decliners.