Stocks in Tokyo posted steep losses Thursday as the Bank of Japan decided not to step up monetary easing, darkening investor sentiment already alarmed by weak U.S. gross domestic product data.
The 225-issue Nikkei Stock Average lost 538.94 points, or 2.69 percent, from Tuesday to close at 19,520.01, its biggest one-day loss since Feb. 4, 2014.
Tokyo markets were closed Wednesday for a holiday.
The broader Topix index of all first section issues on the Tokyo Stock Exchange finished 34.64 points, or 2.13 percent, lower at 1,592.79.
Stocks opened sharply lower in the morning, weighed down by U.S. GDP data released Wednesday showing the economy grew just 0.2 percent in the January-March quarter, well below market expectations.
The Nikkei then edged lower before dropping steeply after the central bank decided to keep its policy unchanged.
Yutaka Miura, a senior technical analyst at Mizuho Securities Co., said despite the drop that followed the BOJ's decision, only a narrow minority of observers expected the BOJ to roll out further easing at this stage.
"Sentiment was weak already, so traders used the BOJ's as-expected move as a cue to sell ahead of the upcoming long holiday," Miura said. After trading ends on Friday, Tokyo markets will be closed until next Thursday.
On the first section, declining issues trounced advancing ones 1,464 to 337, while 81 ended the day unchanged.
Decliners were led by information and communication, food and brokerage issues, while only shipping and mining gained ground. Over 150 listed companies were scheduled to post earnings Thursday.
Trading volume on the main section surged to 2.719 billion shares from 2.087 billion on Tuesday.