The Nikkei Average opened slightly lower, but selling eased toward the afternoon session. Rebalancing activity in response to moves in US markets also weighed on the market, although the decline from the previous close narrowed by the close.
US markets were soft at the end of last week, with views divided over how to address inflation ahead of a speech by Federal Reserve Chair Warsh. The market turned lower on deteriorating consumer confidence and weak PMI data, and the Nikkei Average began trading slightly lower while monitoring developments in the US.
The Nikkei Average closed down ¥93.63 from the previous day at ¥66,311.93. Trading volume on the TSE Prime Market was 2.67487 billion shares, with trading value totaling ¥9.3583 trillion. Advancing stocks accounted for 56.6% and declining stocks for 40.7%.
Among the gainers were Fast Retailing, Kioxia Holdings, Recruit Holdings, Fujikura, SoftBank Group, Tokyo Electron, Ibiden, KDDI, Sony Group, Daikin Industries, Kyocera, Suzuki Motor, Fujifilm, Nitto Denko and Toyota. Decliners included Advantest, TDK, Murata Manufacturing, Lasertec, Chugai Pharmaceutical, Toyota Tsusho, Daiichi Sankyo, Disco, Sumitomo Metal Mining, Terumo, Konami Group, Olympus, Sumitomo Realty & Development, Mitsubishi Heavy Industries and Hitachi.
From a technical perspective, the index fell below its 75-day moving average again, and that level was viewed as resistance overhead. Expectations of US interest-rate hikes became the market's focus, prompting selling centered on technology stocks, but buying back of positions spread during the afternoon session, narrowing the decline by the close.