Tokyo: Nikkei posts biggest fall in 4 weeks after hawkish Fed comments

[TOKYO] Japan's Nikkei share average fell on Wednesday (Apr 6) by its most in nearly 4 weeks, tracking Wall Street as hawkish comments from US Federal Reserve officials raised prospects of bigger rate hikes and stoked worries about a slowdown in economic growth.

The Nikkei lost 1.58 per cent to close at 27,350.30, posting its biggest daily fall since Mar 11. The broader Topix slipped 1.34 per cent to 1,922.91.

Wall Street's main indexes fell overnight, dragged down by tech and other growth stocks, after Fed Governor Lael Brainard said she expected rapid reductions to the central bank's balance sheet alongside increases to the benchmark interest rate.

"Brainard's remarks hit investor sentiment, and the overnight decline in Nasdaq prompted a sell-off in technology stocks today," said Takatoshi Itoshima, a strategist at Pictet Asset Management.

"But overall, the Japanese market is relatively cheap, so I expect some demand for buying stocks at a decline."

Minutes of last month's Fed meeting, due at 6 pm GMT, may add detail to policymakers' thinking about how quickly they could move to reduce bond holdings and lift interest rates.

In Japan, chipmaking equipment maker Tokyo Electron dragged down the Nikkei the most, falling 3.63 per cent, followed by technology investor SoftBank Group, which fell 2.81 per cent. Air-conditioner maker Daikin Industries lost 3.52 per cent.

Refining was the only sector that rose among the Tokyo Stock Exchange's 33 industry sub-indexes, advancing 1.35 per cent.

Cosmo Energy Holdings surged 13.44 per cent after a fund backed by activist investor Yoshiaki Murakami obtained a 5.81 per cent stake in the crude oil importer and refiner.

Peer Idemitsu Kosan rose 1.67 per cent. Eneos reversed its early gains to edge down 0.2 per cent. REUTERS