TOKYO: Japan’s Nikkei share average ended lower on Friday and posted its biggest weekly drop since mid-June, with chip-related stocks leading the day’s decline in line with a slump on Wall Street overnight.
Shippers and other economically sensitive stocks also languished amid worries about continued policy tightening at the U.S. Federal Reserve and other major central banks that could trigger a recession.
The Nikkei ended the day 1.03% lower at 26,235.25, taking its weekly decline to 4.69%.
However, the index closed well above the session’s lows amid some share buy back, with investors also not wanting to take extreme positions ahead of U.S. inflation data later in the day, according to market participants.
The broader Topix lost 0.54% to close at 1,897.94, while down 2.68% for the week.
“Concerns that protracted monetary tightening among central banks will impede global growth is showing up in stock market moves,” Nomura strategist Maki Sawada said in a media call.
“For next week too, that should continue to cap upside.”
However, a lot of technical indicators for the Nikkei are now showing conditions are oversold, offering hope for a near-term rebound, she added.
The Nikkei has fallen in six out of the last seven trading sessions, buffetted both by the Bank of Japan’s surprise hawkish policy tweak on Tuesday and ongoing worries about the economic outlook for the United States in particular.
The Topix’s sea transport sector dropped 1.89%, making it the worst performer.
Chip-making equipment giants Tokyo Electron and Advantest were the Nikkei’s biggest drags, falling 3.69% and 4.49%, respectively, following big losses for U.S. peers after a glum forecast from Micron Technology Inc.
Utilities were a bright spot throughout the day though, with Kansai Electric Power surging 5.28% to be the Nikkei’s best performer, after the Japanese government adopted a new policy promoting greater use of nuclear energy.
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