The Nikkei average extended its sharp decline during the morning session, with losses widening toward the closing level. Selling was concentrated in semiconductor-related stocks, as investor caution in response to U.S. market trends weighed on sentiment.
The Nikkei average ended the morning session at ¥67,292.39, down ¥1,738.53, with estimated trading volume of 1.09035 billion shares. Against the backdrop of trends in U.S. equity markets, the Nikkei continued to trade lower.
Among individual stocks, Fast Retailing, Konami Group, Toyota Tsusho, Recruit Holdings, Chugai Pharmaceutical, Terumo, Toyota, Bandai Namco Holdings, Astellas Pharma, Daikin Industries, Shionogi, ITOCHU, KDDI, Mitsui & Co. and Honda were among the gainers. Meanwhile, Advantest, Tokyo Electron, SoftBank Group, Kioxia Holdings, Ibiden, TDK, Fujikura, Murata Manufacturing, Taiyo Yuden, KOKUSAI ELECTRIC, Lasertec, SCREEN Holdings, Disco, Kyocera and ROHM declined.
By sector, marine transportation, securities and commodity futures trading, and insurance rose, while nonferrous metals, electrical equipment, and metal products fell. The market was expected to remain near its lows in the afternoon session, and the possibility that the Nikkei average would fall well below ¥70,000 was cited. In the United States, reports said that a prominent short-selling investor had downgraded their investment view on the technology sector. Although the Dow remained firm, there was a view that the afternoon session's direction would depend on Nasdaq movements.
The focus in the afternoon session was expected to shift to whether inflows into domestic-demand and financial stocks would continue and whether long positions would be unwound. Oil prices and developments in expectations for an early rate hike could also affect investor sentiment.