TOKYO: Tokyo stocks ended lower on Tuesday after a long weekend, as US employment data released last week rekindled speculation over more Federal Reserve interest rate hikes.

The benchmark Nikkei 225 index was down 2.64 percent, or 714.86 points, to end at 26,401.25, while the broader Topix index slipped 1.86 percent, or 35.56 points, to 1,871.24.

The dollar stood at 145.79 yen, against 145.77 yen in New York late Monday, hovering around the level at which the Japanese government intervened last month.

September jobs data released Friday showed the US employment market slowing only modestly, setting the stage for more rate hikes.

The relatively strong employment data “negated optimistic views among investors last week that major central banks around the world might let up on monetary tightening”, Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.

Last week, Tokyo stocks enjoyed gains as investors briefly took heart from factors including a smaller-than-expected 0.25 percent point rate hike by the Reserve Bank of Australia.

Further contributing to losses on Tuesday was the US announcement Friday of new export controls aimed at restricting China’s ability to buy and manufacture high-end chips with military applications.

This hit the semiconductor industry especially hard, as “the prospect of a US-China battle intensifying strengthened the view that demand (for chips) may be hurt”, said Horiuchi.

Tokyo stocks close higher, rebounding from rout

Chip-making equipment manufacturer Tokyo Electron tumbled 5.48 percent to 36,700, and chip-testing equipment maker Advantest plunged 4.90 percent to 6,980 yen.

Among other major shares in Tokyo, SoftBank Group was down 0.96 percent to 5,451 yen, Sony Group plummeted 4.09 percent to 9,486 yen and Toyota lost 0.95 percent to 1,966.5 yen.

Uniqlo operator Fast Retailing sank 3.86 percent to 76,800 yen.