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Tokyo stocks turned lower Wednesday, hit by selling on a rally in thin trading ahead of a speech by U.S. Federal Reserve Chairman Jerome Powell.

The 225-issue Nikkei average of the Tokyo Stock Exchange fell 109.75 points, or 0.38%, to close at 28,608.49, after extending its winning streak Tuesday with a rise of 149.22 points.

The Topix index of all TSE first section issues dipped 4.48 points, or 0.23%, to end at 1,963.16, following a 14.31-point jump the previous day.

Stocks sank deep at the outset, in response to fallbacks in all three key U.S. stock indicators Tuesday.

Although the market narrowed the initial loss thanks to buying of shares backed by strong earnings prospects, it remained under selling pressure generated by its two-day rally until Tuesday, brokers said.

Trading lacked vigor with many players sitting on the fence to wait for the Fed chief’s first round of congressional testimonies later on Wednesday, they noted.

Masayuki Otani, chief market analyst at Securities Japan Inc., pointed out that the Nikkei average fared worse than the broader Topix index “reflecting the recent weaker performance of heavily weighted components of the benchmark index, such as Fast Retailing.”

“Concerns over the highly infectious delta coronavirus variant kept dampening sentiment,” said Kazuo Kamitani, strategist at Nomura Securities Co.

Meanwhile, Kamitani downplayed the adverse impact of the U.S. consumer price index’s sharp rise in June, reported Monday, on the Tokyo market.

“Investors have yet to question the assessment by Powell and other Fed policymakers that the current inflation spike is transitory,” he said.

On the TSE first section, decliners outnumbered gainers 1,177 to 910 while 105 issues were unchanged. Volume inched up to 981 million shares from Tuesday’s 957 million shares.

Tire-makers plunged, with Bridgestone down 3.87% and Yokohama Rubber 3.85%.

Fujifilm sank 3.57% after Nomura Securities Co. lowered its investment rating for the technology firm.

On the other hand, movie distributor Toho surged 11.09% after posting a 3.75-fold jump in operating profit for March-May.

Other winners included Z Holdings, the parent of internet service provider Yahoo Japan.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average fell 110 points to end at 28,540.

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