TOKYO: Japan’s Nikkei share average marked a second week of declines on Friday as investors weighed the risk outlooks ahead of a domestic election that could see the ruling party lose its majority.

The Nikkei closed 0.6% lower at 37,913.92, posting a 2.7% loss for the week.

The broader Topix finished down 0.7% at 2,618.32.

The markets have been on edge as recent opinion polls suggest voters could end the Liberal Democratic Party’s over decade-long dominance on Sunday, forcing the ruling party into power-sharing deals that may undermine the country’s leadership.

“That’s basically the scenario for ‘sell Japan’,” with investors considering various scenarios on how such an outcome could impact the fiscal and monetary policy outlook, said Naka Matsuzawa, chief macro strategist at Nomura Securities.

The losses were widespread as investors adjusted positions on Friday, the last day of trading before votes are counted on Oct. 27. Of the Nikkei’s 225 constituents, 176 declined, while only 48 advanced. One was untraded.

All 33 industry sectors were in the red, led by the shipping sector’s 3.6% decline.

Wei Li, a multi-asset quant solutions portfolio manager at BNP Paribas Asset Management, expects Japanese markets could react positively if the LDP-Komeito coalition secured a simple majority. Failing to do so, however, could heighten volatility.