Stocks plunged Wednesday, sinking the Nikkei average to its lowest level in more than a week as the yen strengthened amid expectations of prolonged monetary stimulus in the U.S.
The Nikkei 225 average lost 287.20 points, or 1.95 percent, to close at 14,426.05, its lowest level since Oct. 11. It added 19.68 points Tuesday.
The Topix shed 18.46 points, or 1.52 percent, to end at 1,195.98 a day after gaining 2.08 points.
The TSE got off to a buoyant start following an overnight rise in New York stocks after weaker than expected U.S. employment data fueled speculation that the Fed will keep its easy money policy intact until next year.
The U.S. Labor Department report released Tuesday showed that employers added 148,000 new jobs to their payrolls in September, below market expectations for an increase of 180,000.
Expectations that the U.S. central bank could push back the timing for cutting back on its asset purchases prompted investors to shift money from the dollar to other major currencies, pushing up the yen. The stronger yen then weighed on Tokyo stocks, brokers said.
The Nikkei fell in the afternoon, hit by futures-led selling, as fears grew that the dollar could go further down against the yen despite the previous belief that the currency had already bottomed out, an official at a bank-affiliated brokerage firm said.
The lackluster performances of Asian markets also weighed on Tokyo stocks, said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
As the Nikkei ended below the 25-day moving average, the market yardstick could adjust to levels around 14,000, Miura said.
Losers far exceeded winners 1,452 to 233 in the first section, while 69 issues were unchanged. Volume rose to 2.727 billion shares from 2.172 billion Tuesday.
Stocks fell across the board, with all 33 first-section sector subindexes ending the day in negative territory.
Japanese government bonds rose further Wednesday, with the benchmark 10-year yield briefly hitting a five-month low.
The yield on the latest 330th 10-year issue with a 0.8 percent coupon fell to 0.600 percent briefly in morning interdealer trading, its lowest level since May 9.
JGBs attracted buying after U.S. Treasuries rose overnight on weaker than expected U.S. employment data.