Stocks closed lower on the Tokyo Stock Exchange on Wednesday, as investors grew concerned about the results of the closely watched U.S. midterm elections.
The key 225-issue Nikkei average fell 61.95 points, or 0.28 percent, to end at 22,085.80. It gained 248.76 points Tuesday.
The Topix index of all first-section issues finished down 6.92 points, or 0.42 percent, at 1,652.43. It rose 18.96 points the previous day.
The Nikkei average briefly dipped into negative territory in early morning trading following media reports that the Democratic Party was likely to win back a majority in the House of Representatives, leading to a divided Congress.
The key market gauge soon swung back into the sunny side and extended the gain after Republicans’ lead in the House race was reported, market sources said.
In the afternoon, however, both Nikkei and Topix indexes turned to head south as vote counting progressed and Democrats’ victory in the House contest became certain, the sources added.
Democrats’ regaining of control of the House will prevent smooth enactment of bills introduced by the administration of President Donald Trump, brokers said.
Wednesday’s market downturn came as “expectations receded” for the realization of further tax cuts and other Republican economic policy measures, said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co.
Meanwhile, Yutaka Miura, senior technical analyst at Mizuho Securities Co., offered the view that stock transactions were led by short-term players.
Democrats’ reported victory in the House was “not much surprising,” Miura also said, indicating that it had largely been factored in.
Falling issues outnumbered rising ones 1,095 to 939 on the TSE’s first section, while 77 issues were unchanged.
Volume grew to 1.683 billion shares, from 1.342 billion shares Tuesday.
Nonferrous metal producer Mitsubishi Materials Corp. closed 8.33 percent lower after revising down its operating profit forecast for the year through March next year.
Other major losers included pharmaceutical company Astellas Pharma Inc. and air conditioner-maker Daikin Industries.
By contrast, Nippon Telegraph and Telephone Corp. finished 4.85 percent higher as investors took heart from its brisk earnings results and rosy forecasts, as well as a plan to buy back own shares.
Also buoyant were semiconductor-related Shin-Etsu Chemical Co. and clothing store chain operator Fast Retailing Co.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average sagged 80 points to end at 22,120.