Japan’s Nikkei share average tumbled nearly 2 per cent to a three-week low on Friday (Apr 5), logging its worst week since December 2022, as tech shares slid on Wall Street’s lead.

Investors were also cautious ahead of a key monthly US jobs report due later in the day, with the outlook for when the Federal Reserve will cut interest rates becoming increasingly unclear this week.

The Nikkei dropped 1.96 per cent, or 781 points, to 38,992.08, bringing its loss for the week to 3.41 per cent.

“The biggest factor for the Nikkei’s decline is technical,” said Kazuo Kamitani, an equities strategist at Nomura Securities.

It was a second straight weekly loss for the benchmark index, as it pulled back from an all-time high of 41,087.75 reached on March 22.

The 25-day moving average turned lower on Friday, meaning “there’s the risk that the Nikkei is in for another step down from here,” Kamitani said.

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“The 25-day moving average has a mysterious gravitational pull, and is very much in focus for the market,” he added. “All of next week, stock market moves could be a bit volatile.”

Chip sector shares were among the biggest drags on Friday, with Tokyo Electron dropping 5.6 per cent to shave 217 points from the Nikkei. Advantest erased another 81 points with a 4.85 per cent decline.

Other notable losers included startup investor SoftBank Group, which slid 2.77 per cent, and Uniqlo chain operator Fast Retailing, which skidded 2.26 per cent.

Of the Nikkei’s 225 components, 159 declined while 62 advanced, with four flat.

The broader Topix lost 1.08 per cent, with a sub-index of growth shares dropping 1.49 per cent, compared with a 0.68 per cent decline for value stocks.

Seasonality also contributed to equity weakness, said Norihiro Yamaguchi, senior Japan economist at Oxford Economics.

“It is the very beginning of the new fiscal year, and earnings season is approaching soon,” leading investors to adopt a wait-and-see stance, Yamaguchi said. REUTERS