Tokyo stocks fell further on Friday, as market players were discouraged by drops in Chinese markets and U.S. stock futures as fears grew of an escalation in U.S.-China tensions.
The Nikkei average of 225 selected issues from the first section of the Tokyo Stock Exchange fell 164.15 points, or 0.80 percent, to end at 20,388.16. On Thursday, the key index lost 42.84 points.
The Topix index of all first-section issues closed down 13.41 points, or 0.90 percent, at 1,477.80, after giving up 3.48 points the previous day.
The Tokyo market opened slightly higher, aided by buybacks after its drop the previous day, brokers said.
After fluctuating around Thursday's closing levels in the early morning, the market slipped into negative territory, with sentiment dampened by tumbles in Chinese stocks and Dow Jones industrial average futures in off-hours trading as concerns grew about tensions between the economic giants.
Such fears were reignited following a Chinese state-run news agency report on Thursday that China will discuss a national security law for Hong Kong at a meeting of the National People's Congress, which started on Friday, brokers said.
Investor sentiment further chilled after U.S. President Donald Trump said that his country will react strongly if China passes such legislation.
Both Tokyo market indexes continued to fluctuate tightly on the minus side in the afternoon, weighed down by such concerns.
"Position-squaring selling prevailed before the weekend," Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co., said. The Tokyo market rose for four straight trading days through Wednesday.
On the other hand, brokers noted that the market's fall was limited by expectations for a restart in economic activity in Japan, with the central government possibly lifting the coronavirus state of emergency still placed in five prefectures, including Tokyo, as early as Monday.
Falling issues far outnumbered rising ones 1,463 to 631 in the first section, while 77 issues were unchanged. Volume increased to 1.229 billion shares from Thursday's 1.148 billion shares.
Maeda plunged 8.12 percent, after the general contractor's operating profit for the full business year ended in March failed to beat the market consensus.
Restaurant operator Skylark fell 2.87 percent, in response to a 99.3 percent plunge in operating profit in January-March due to the coronavirus pandemic.
Among other major losers were shipping firm Nippon Yusen and industrial robot producer Fanuc.
On the other hand, technology investor SoftBank Group rose 2.83 percent, following an announcement that it will sell some shares in Softbank Corp., its mobile subsidiary, to raise funds and improve its own financial standing.
Airline ANA and drug maker Chugai also went up.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average tumbled 260 points to end at 20,360.