Stocks tumbled on the Tokyo Stock Exchange Thursday, weighed down by a stronger yen and an overnight setback on Wall Street.
The 225-issue Nikkei average plunged 436.87 points, or 2.01 percent, to end at 21,341.74. On Wednesday, the key market gauge gave up 106.63 points.
The Topix index of all issues listed on the TSE first section finished down 27.42 points, or 1.72 percent, at 1,568.87, after losing 6.71 points the previous day.
The Tokyo market started lower and dived deeper into negative territory in the morning, with the Nikkei temporarily shedding more than 500 points.
The decline stemmed from the appreciation of the yen and the fall in U.S. stock prices Wednesday. The Dow Jones Industrial Average closed nearly 500 points lower due to concerns over deterioration in the U.S. economy, fueled by dismal U.S. employment data for September released by Automatic Data Processing Inc., brokers said.
Although the Tokyo market resisted falling further in the afternoon, both indexes fluctuated narrowly on the minus side for the remainder of the day.
The market was also “dragged down by concerns over an escalation in trade tensions between the United States and the European Union,” Yoshihiko Tabei, chief analyst at Naito Securities Co., said.
The World Trade Organization on Wednesday approved punitive tariffs by the United States on European goods worth up to $7.5 billion a year, which will be placed to counter the EU’s subsidies to Airbus SAS.
Meanwhile, brokers said that market players adopted a wait-and-see approach in the afternoon before the announcement later on Thursday of the U.S. Institute for Supply Management’s nonmanufacturing index for September.
Noting that investors were focusing on the U.S. government’s employment statistics for September, to be released Friday, Tabei suggested that trading in the Tokyo market on the same day may be sluggish as investors will be reluctant to tilt their positions either way.
Falling issues far outnumbered rising ones 1,963 to 159 in the first section, while 29 issues were unchanged.
Volume rose to 1.223 billion shares from Wednesday’s 1.171 billion shares.
Export-oriented companies, including automaker Toyota Motor Corp. and construction machinery-maker Komatsu, met with selling, due to concerns over a downturn in the U.S. economy and a stronger yen.
Financial issues lost ground, reflecting a drop in their U.S. peers, with megabank Mitsubishi UFJ Financial Group Inc. finishing down 1.47 percent and insurer Tokio Marine Holdings Inc. 1.79 percent.
Clothing store chain Fast Retailing Co. dropped 3.89 percent, pulled down by a fall in its same-store sales for September.
Also on the negative side were air conditioner-maker Daikin Industries and electronics giant Panasonic Corp.
By contrast, Line Corp. surged 5.42 percent after a weekly magazine reported that Softbank Group Chairman Masayoshi Son is interested in acquiring the messaging app provider.
A handful of winners also included chipmaking equipment maker Tokyo Electron and drugmaker Daiichi Sankyo Co.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average fell 440 points to end at 21,270.