Tokyo stocks turned sharply lower to snap their two-day winning streak Friday, with sentiment battered by a major setback in the U.S. market.
The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange gave up 260.10 points, or 1.11 percent, to end at 23,205.43. On Thursday, the key market gauge soared 218.38 points.
The Topix index of all first-section issues finished 14.64 points, or 0.90 percent, lower at 1,616.60, after gaining 7.84 points the previous day.
Stocks nose-dived right after the market opening, as sell orders piled up in the wake of sharp drops in all three key U.S. market yardsticks Thursday, brokers said, adding that shares in the electric and precision equipment sectors, in particular, bled heavily on the tech-heavy Nasdaq composite index’s dive of nearly 5 pct.
But the Tokyo market resisted falling further, as its initial plunge prompted players to buy the dip.
“Profit-taking gathered steam together with position-squaring selling ahead of the release later on Friday of the U.S. government’s jobs report for August and the weekend,” said Hirohumi Yamamoto, strategist at Toyo Securities Co.
But he also pointed out that Japanese stocks’ losses were limited compared with their U.S. peers’ thanks to their attractiveness as laggards.
On the TSE’s first section, falling issues outnumbered rising ones 1,457 to 617 with 97 issues unchanged.
Technology and entertainment giant Sony, electronic parts maker Murata Manufacturing and other export-oriented issues met with heavy selling.
The U.S. semiconductor sector’s weakness pushed down chipmaking gear manufacturer Tokyo Electron and test device maker Advantest, among others.
Technology investor SoftBank Group and job information service firm recruit Holdings were downbeat as well.
On the other hand, regional banks including Tsukuba Bank and Tochigi Bank attracted purchases after Chief Cabinet Secretary Yoshihide Suga, a promising candidate to succeed outgoing Prime Minister Shinzo Abe, suggested Thursday a possible realignment of such banks.
Automaker Honda and tire maker Bridgestone were also in the green.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average fell 300 points to end at 23,170.