This May 7, 2020 file photo shows the Tokyo Stock Exchange. (Mainichi)
TOKYO (Kyodo) — Tokyo stocks fell sharply Wednesday, dragged down by semiconductor-related issues on caution over the U.S. government’s increased involvement in the chip industry and moves to lock in gains after recent surges.
The 225-issue Nikkei Stock Average ended down 657.74 points, or 1.51 percent, from Tuesday at 42,888.55. The broader Topix index finished 17.72 points, or 0.57 percent, lower at 3,098.91.
On the top-tier Prime Market, notable decliners were nonferrous metal, information and communication and machinery issues.
The U.S. dollar weakened to the lower 147 yen zone in Tokyo ahead of a speech by U.S. Federal Reserve Chair Jerome Powell in Jackson Hole, Wyoming, later this week amid growing speculation the interest rate could be cut by the central bank, dealers said.
The Nikkei stock index dropped below the 43,000 line, tracking overnight losses by their U.S. counterparts after U.S. Commerce Secretary Howard Lutnick said the government aims to take a stake in struggling chipmaker Intel Corp.
His remark, which came after reports last week that major U.S. chipmakers had agreed to pay the government 15 percent of their semiconductor revenues from China, fueled concern about the administration’s expanding influence in the industry, brokers said.
“The recent developments may have triggered the selling of some chip issues but many investors likely wanted to trim their positions after such shares climbed sharply,” said Makoto Sengoku, senior equity market analyst at Tokai Tokyo Intelligence Laboratory Co.
Among shares that saw steep gains in a recent rally, heavyweight SoftBank Group finished the day down 7.1 percent at 14,890 yen.
AloJapan.com