TOKYO: Japan’s Nikkei share average sank for a third straight session on Friday, dragged down by a tumble for Uniqlo store chain operator following a disappointing earnings report.

Investors were cautious ahead of a closely watched US monthly payrolls report later in the day, which could provide crucial clues on the Federal Reserve’s policy path.

Wall Street was closed overnight to mark the passing of former President Jimmy Carter.

The Nikkei index dropped 0.49%, or 193.33 points, to 39,411.76 as of the midday recess, bringing its three-day decline to 1.68%. For the week, it is down 1.21%.

Most of the day’s declines were due to a 6.53% plunge in Uniqlo-owner Fast Retailing, by far the most heavily weighted stock on the Nikkei, which shaved off a hefty 331.35 points.

Fast Retailing was both the biggest loser points- and percentage-wise among the Nikkei’s 225 constituents after reporting first-quarter financial results that trailed analyst forecasts. By contrast, chip-sector shares underpinned the Nikkei.

Nvidia supplier Advantest was the top percentage riser and biggest points gainer on the Nikkei, climbing 5.18%.

Chip-making equipment major Tokyo Electron added 1.28%.

Tech was the only sector to post gains on the Nikkei.

Japan’s Nikkei falls as investors book profits, chip-related shares weigh

The broader Topix, less tech-heavy and not as susceptible to moves in big stocks like Fast Retailing, slipped 0.31%.

Despite recent weakness, “the Nikkei is likely to stay robust, supported by a weak yen”, said Norihiro Yamaguchi, senior Japan economist at Oxford Economics.

Domestic earnings season will move into higher gear later this month and “overall results are likely to stay solid”, he added.

The yen was steady at around 158.26 per US dollar - not far from 158.55, the weakest level since mid-July 2024 reached earlier this week.

A cheaper yen inflates the value of overseas revenues for Japan’s many heavyweight exporters.