Tokyo stocks closed lower Wednesday as disappointing corporate earning results triggered selling along with concerns over rising coronavirus cases, with a comparatively firm yen against the US dollar weighing on export-oriented issues.
The 225-issue Nikkei Stock Average dropped 260.27 points, or 1.15 percent, from Tuesday to close the day at 22,397.11.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, lost 20.08 points, or 1.28 percent, to finish at 1,549.04.
Investor sentiment remained pessimistic sending shares lower for a fourth straight day as disappointing corporate earnings and outlooks underscored concerns about the continued negative impact of the pandemic, local brokers said.
They added that the virus’ spread in Japan added to a downbeat mood, exacerbated by Japan’s daily new cases reaching a record high the previous day, with prefectures outside Tokyo, including Osaka and Aichi recording record daily cases.
“Disruption caused by the virus to many major companies’ sales and other operations has brought much more serious damage than the market had anticipated,” Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., was quoted as saying.
“Optimism for an early economic upturn is quickly fading,” Fujito added.
Market analysts said that selling accelerated in the afternoon amid an ongoing risk-off mood, fueled by concerns of further lackluster earnings reports from Japanese companies for the April-June quarter when firms here saw demand wane amid a state of emergency over the virus first declared in April.
The yen’s rise against the US dollar also dented market sentiment, with exporter issues reliant on a weaker yen to boost profits made overseas when repatriated tracking lower, market players said.
Investors also remained sidelined ahead of the conclusion of the the US Federal Reserve’s policy setting meeting Wednesday as despite expectations the Fed will stay pat on policy, Chairman Jerome Powell’s speech would be keenly eyed for clues as to the future direction of the Fed’s policy, market strategists said.
By the close of play, steel and iron, transportation equipment and consumer credit issues comprised those that declined the most. Issues whose firms reported subpar earnings lost ground, with Canon losing 13.5 percent, after reporting its first ever quarterly loss.
Nissan Motor was also among notable decliners, tumbling 10.4 percent after the automaker said the previous day it expects to log a hefty net loss in the current business year through March.
Fanuc Corp., meanwhile, fell 7.2 percent after the industrial robotics maker projected its operating profit to decline for the fiscal year.
Issues that fell outpaced those that rose by 1,810 to 309 on the First Section, while 53 ended the day unchanged.
On the main section on Wednesday, 1.186 billion shares changed hands rising from Tuesday’s volume of 1.088 billion shares.
The turnover on the third trading day of the week came to 2.105 trillion yen (20.064 billion U.S. dollars).