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Japan's Nikkei drops 5% after Wall Street sell-off
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Japan's Nikkei drops 5% after Wall Street sell-off
Aug 1, 2024 7:13 PM

TOKYO, Aug 2 (Reuters) - Japan's Nikkei share average

tumbled 5% on Friday to hit a six-month low after Wall Street

slumped overnight on U.S. economic worries, while uncertainties

over the Japanese central bank's tightening path also weighed on

the market.

The Nikkei was down 4.7% at 36,333.21, as of 0128

GMT. Earlier in the day, it declined as much as 5% to hit its

lowest since Feb. 7.

The broader Topix was down 5.5% at 2,554.85.

U.S. stocks kicked off August sharply lower after a round of

economic data spurred concerns the economy may be slowing faster

than anticipated while the Federal Reserve maintains a

restrictive monetary policy.

"Momentum in the U.S. market turned negative overnight, with

concerns about recession rising. That weighed on Japanese

equities a lot today," said Yugo Tsuboi, chief strategist at

Daiwa Securities.

"In Japan, the market is uncertain about whether the BOJ

will raise interest rates again this year and by how much," said

Tsuboi, adding that higher rates could strengthen the yen and

that could hurt exporters.

Chip-making equipment maker Tokyo Electron ( TOELF ) tanked

12% to drag the Nikkei the most. Chip-testing equipment maker

Advantest ( ADTTF ) slipped 7%. Technology investor SoftBank

Group lost 6.8%.

All the 33 industry sub-indexes on the Tokyo Stock Exchange

fell, with financials sectors leading the losses. The brokerage

sector lost 11% and the banking sector fell

8.4%.

The Nikkei Volatility index was near 28%, its

highest since April 19.

(Reporting by Junko Fujita, additoinal reporting by Ankur

Banerjee; Editing by Subhranshu Sahu)

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