Stocks lost further ground on the Tokyo Stock Exchange on Tuesday, hit by position adjustment and futures-led selling ahead of the U.S. Federal Reserve’s monetary policy meeting, which was to begin later Tuesday.
The Nikkei tumbled 317.52 points, or 1.68 percent, to 18,565.90, the lowest finish since Oct. 22. On Monday, it fell 347.06 points.
The Topix dipped 25.33 points, or 1.66 percent, to 1,502.55, after falling 21.63 points the previous day.
Despite a rebound in U.S. stocks overnight, investors stepped up selling to adjust positions prior to the two-day Fed meeting.
The Nikkei accelerated its downswing in the afternoon due to a flurry of futures-led selling and increased position-adjustment selling by foreign investors amid thin trading, the brokers said.
The yen’s continued strength against the dollar weighed on mainstay export-oriented issues.
Analysts forecast the U.S. central bank to raise interest rates by 0.25 percentage point.
Investors have already factored in such a U.S. monetary policy shift, and “global stock market turmoil is expected” if the Fed postpones an interest rate increase, said Nobuyuki Fujimoto, market analyst at SBI Securities Co.
Investors are becoming increasingly jittery as they face difficulty predicting how quickly the Fed will raise rates following the initial increase, an official at a foreign-affiliated brokerage firm said.
Falling issues outnumbered rising ones 1,683 to 182 in the TSE’s first section, while 60 issues were unchanged.
Volume rose slightly to 2,068 million shares from Monday’s 2,039 million shares.
All 33 sector subindexes in the first section closed lower.
Large-capitalization issues were battered. Among them were automaker Toyota, banking groups Mitsubishi UFJ and Mizuho, and electronics manufacturers Canon and Hitachi.
Heavyweight components of the Nikkei average were also dampened. They include mobile carrier Softbank, clothing retailer Fast Retailing and robot maker Fanuc.
Real estate developer Leopalace21 surged 2.1 percent on recent government moves to allow owners of condominiums and other private houses to use vacant rooms to accommodate foreign visitors to Japan, brokers said.
Other winners include Nippon Telegraph and Telephone, Japan Airlines and railway and hotel group Seibu Holdings.
In index futures trading on the Osaka Exchange, the March contract on the Nikkei average sagged 290 points to close at 18,550.