Tokyo stocks fell back Wednesday as selling to lock in profits pushed them down in thin trading.
The 225-issue Nikkei average dropped 166.41 points, or 0.75 percent, to end at 22,121.73. On Tuesday, the key market gauge rose 293.10 points.
The Topix index of all first-section issues on the Tokyo Stock Exchange closed down 20.16 points, or 1.29 percent, at 1,538.61 after gaining 9.55 points the previous day.
Buying outpaced selling in early trading, with the market supported by an overnight rise in U.S. equities and the yen’s initial weakness.
But persistent concerns over the spread of the new coronavirus in and outside Japan hurt the stock market, sending the Nikkei into the minus column later in the morning, brokers said.
The Nikkei sank deeper into negative territory in the afternoon, pressured by profit-taking induced by the yen’s rebound and a fall in U.S. stock index futures in off-hours trading, they said.
“Some investors moved to square positions ahead of the U.S. Institute for Supply Management’s manufacturing index for June and the U.S. Labor Department’s jobs data for the same month,” due out Wednesday and Thursday, respectively, Masayuki Otani, chief market analyst at Securities Japan Inc., said.
The Tokyo market reacted little to sharp deterioration in business sentiment shown in the Bank of Japan’s tankan quarterly survey for June, released just before the opening bell, as such dismal results had been widely expected amid the coronavirus crisis, brokers said.
According to the June tankan, the headline diffusion index for large manufacturers’ current business conditions fell 26 points from March to minus 34, hitting the lowest level since minus 48 in June 2009 in the aftermath of the September 2008 collapse of U.S. investment bank Lehman Brothers, which triggered a global financial crisis.
Falling issues far outnumbered rising ones 1,849 to 274 on the TSE’s first section, while 46 issues were unchanged.
Volume decreased to 1.184 billion shares from Tuesday’s 1.240 billion shares.
Industrial robot producer Fanuc, construction machinery-maker Komatsu and other China-linked issues met with selling on concerns over a resurgence of U.S.-China tensions after China’s national security law to enhance its control of Hong Kong went into force.
Mitsui Fudosan, Mitsubishi Estate and Sumitomo Realty lost ground after Mitsubishi UFJ Morgan Stanley Securities lowered its investment ratings and target prices for the three major real estate firms.
Among other losers were mobile phone carrier KDDI and job information service firm Recruit Holdings.
Meanwhile, furniture retailer Nitori extended its winning streak to a 13th session.
Also on the positive side were chipmaking gear manufacturer Tokyo Electron and technology investor SoftBank Group.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average fell 140 points to 22,090.