TOKYO: Japan’s Nikkei share average fell 2% on Thursday after a three-session rally, with technology stocks leading the retreat, while investors waited for a Bank of Japan policy decision on Friday for further direction.

The Nikkei closed 2.16% lower at 37,628.48. It had risen 2.4% on Wednesday in its biggest jump in more than a month and reclaimed the 38,000 level.

The broader Topix fell 1.74% to 2,663.53.

“The market has been volatile lately because there are many uncertainties that have changed investors’ premises,” said Kentaro Hayashi, a senior strategist at Daiwa Securities.

“Inflation in the US is more persistent than expected, which has pushed US yields higher, and tensions in the Middle East have lifted oil prices.” A Nikkei volatility index, which on April 19 hit its highest since Oct. 3 at 27.82, was last at 21.50.

Chip-related shares dragged the Nikkei lower, with Tokyo Electron and Advantest falling 3.48% and 1.71%, respectively. Shin-Etsu Chemical lost 2.68%.

Technology investor SoftBank Group fell 1.96%.

Toyota Motor fell 3.34% despite the yen hitting a 34-year low.