TOKYO: Tokyo stocks closed lower on Wednesday, with investors spooked by growing concern that the US Federal Reserve’s aggressive monetary tightening will persist.

The benchmark Nikkei 225 index fell 0.71 percent, or 196.21 points, to 27,430.30, while the broader Topix index was down 0.57 percent, or 10.93 points, at 1,915.65.

The dollar at one point touched a fresh 24-year high of 144.38 yen, after hitting 142.98 in New York.

The yen’s dramatic fall in recent months is mainly down to the widening policy gap between the ultra-loose Bank of Japan and an increasingly hawkish Fed.

In Tokyo, “risk-averse sentiment grew” following falls on Wall Street where investors were “disheartened by longer-term interest rate hikes”, Okasan Online Securities said.

Stocks tank, dollar rises as traders prepare for big rate hikes

“Concerns that Fed monetary tightening will drag on are discouraging investors from buying,” the brokerage said.

Add to that a key European Central Bank meeting on Thursday, where policymakers are poised to deliver another bumper hike, and traders in Japan are feeling “hesitant to buy”, Okasan said.

SoftBank Group fell 2.02 percent to 5,368 yen, Sony Group dived 2.32 percent to 10,525 yen and Toyota lost 0.68 percent to 2,034.5 yen.

Uniqlo operator Fast Retailing was up 0.85 percent at 81,360 yen.

Publishing house Kadokawa was down 2.59 percent at 2,856 yen, having plunged 5.42 percent on Tuesday after reports said that prosecutors suspect the company was involved in a bribery scandal surrounding last year’s Tokyo Olympics.