TOKYO: Tokyo shares closed lower on Friday, after Wall Street stocks tumbled, with more positive economic data prompting concerns among investors about rate hikes by the US Federal Reserve.

The benchmark Nikkei 225 index lost 1.03 percent, or 272.62 points, to end at 26,235.25, while the broader Topix index fell 0.54 percent, or 10.23 points, to 1,897.94.

The dollar traded at 132.70 yen, up from 132.36 yen in New York on Thursday.

The Fed has hiked its benchmark lending rate multiple times this year to rein in surging inflation.

Although it moderated its pace of rate increases this month, Fed Chair Jerome Powell has signalled that the central bank’s battle is not yet over, fuelling market jitters.

A resilient economy could see inflation remaining at higher levels, prompting the Fed to push on with steep rate hikes and hold them at higher levels for longer. “The vibe of the FOMC (Federal Reserve) commentary on the street is getting a tad more hawkish,” Stephen Innes of SPI Asset Management said in a note.

“A better take is that we have a more balanced Fed that is looking to slow the pace of hikes amid better news on inflation, but is conscious of the risks of declaring victory too soon.