TOKYO: Tokyo shares opened lower on Thursday after Wall Street stocks suffered a battering as worries mounted about inflation and corporate profitability.

The benchmark Nikkei 225 index dropped 1.78 percent, or 479.48 points, to 26,431.72 at the open, while the broader Topix index lost 1.79 percent, or 33.69 points, to 1,851.00.

Mizuho Securities said in a note that in Japan, “selling will be dominant following a sharp drop of US shares”.

Tokyo stocks open higher extending US gains

Overnight, the Dow Jones Industrial Average ended down 3.6 percent while the broad-based S&P 500 lost 4.0 percent, and the tech-rich Nasdaq Composite Index plunged 4.7 percent.

“The weakness came as Target’s quarterly earnings added fuel to the recession risk narrative, while the drop of US 10 year yields down… to 2.88 percent offered little support,” Stephen Innes, Managing Partner of SPI Asset Management said.

The dollar traded at 128.24 yen, against 128.20 yen in New York on Wednesday.

Uniqlo operator Fast Retailing dropped 3.68 percent to 57,820 yen while SoftBank Group plummeted 3.99 percent to 4,935 yen.

Toyota lost 2.39 percent to 1,995 yen while Honda fell 2.05 percent to 3,153 yen. Nissan tumbled 3.30 percent to 485.9 yen.

Nintendo added 0.35 percent after Saudi Arabia’s Public Investment Fund bought a five-percent stake in the gaming giant.