Tokyo stocks tumbled Tuesday, as sentiment was chilled by the unabated spread of coronavirus infections in Japan.
The 225-issue Nikkei average gave up 584.99 points, or 1.97%, to end at 29,100.38, snapping its three-session winning streak until Monday, when it inched up 2.00 points.
The Topix index of all first section issues ended 30.31 points, or 1.55%, lower at 1,926.25, following a 4.31-point drop the previous day.
The market got off to a miserable start, after all three major U.S. market gauges turned down Monday with technology shares collapsing on the back of rising long-term interest rates.
Stocks remained deep in negative territory throughout the session, weighed down by fears that continued spikes in new coronavirus cases in the country may lead to the central government’s declaration of a fresh state of emergency.
The yen’s appreciation against the dollar fueled selling of export-oriented issues in particular, such as electronics firms and automakers.
“Market caution against the pandemic heightened with Osaka Prefecture about to request for the declaration and Tokyo expected to follow suit,” said Hirohumi Yamamoto, strategist at Toyo Securities Co.
The central government’s slower responses than local governments’ to the virus crisis also have made many investors question the political stability of the administration of Prime Minister Yoshihide Suga, he noted.
Another source of concern is that tensions between the United States and China over Taiwan have escalated since last week’s joint statement by Suga and U.S. President Joe Biden, he added.
Meanwhile, Maki Sawada, strategist at Nomura Securities Co., pointed out that the market was still underpinned by hopes for a global economic recovery led by the United States.
On the TSE first section, decliners overwhelmed gainers 1,899 to 240, while 52 issues were unchanged. Volume rose to 1.087 billion shares from Monday’s 918 million shares.
Departments store operators Marui Group and Takashimaya plunged 5.91% and 4.09%, respectively, due to concerns over temporary closures under a possible state of emergency.
Semiconductor issues such as testing device manufacturer Advantest suffered from the tech-heavy U.S. Nasdaq composite index’s tumble.
Automakers Mazda and Hino were especially hit hard by the stronger yen.
On the other hand, Mitsui O.S.K. Line and Kawasaki Kisen continued to attract buying along with other shippings.
Paper-maker Oji Holdings rose after revising up its earnings estimates for the year that ended in March.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average slumped 550 points to end at 29,140.
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