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Tokyo: Stocks slump as market remains cautious
[TOKYO] Tokyo stocks dropped on Thursday following falls on Wall Street as market sentiment remained fragile after recent volatility.
The benchmark Nikkei 225 index lost 1.07 per cent or 234.37 points to close at 21,736.44 and the broader Topix index was down 0.88 per cent or 15.44 points at 1,746.17.
"While the market appears to have hit the near-term bottom, investor sentiment has yet to fully recover following recent volatile trade," Hikaru Sato, senior technical analyst at Daiwa Securities, told AFP.
In early trading, the Nikkei index took its lead from declines on Wall Street after minutes from the US central bank's last meeting solidified expectations of interest rate hikes ahead.
"The content of the minutes was no surprise but the US stocks' negative reaction to it dragged the Tokyo market down," said Toshihiko Matsuno at the investor information division of SMBC Nikko Securities.
"US stocks swings indicate it may take some more time for investor sentiment to calm down" from volatility earlier in February, he told AFP.
US stocks were in positive territory most of the session on Wednesday, but began falling about 40 minutes after the Federal Reserve released the minutes of last month's policy meeting.
US central bankers said the recent tax cuts could spur the economy more than expected in the near term, meaning further interest rate hikes would likely be needed, according to the minutes.
The dollar was trading at 107.43 yen, down from 107.74 yen in New York on Wednesday.
In individual stock trade, Honda dropped 1.03 per cent to 3,807 yen and Mitsubishi UFJ Financial lost 0.58 per cent to 764.6 yen.
NTT climbed 2.54 per cent to 4,875 yen after the telecom carrier announced a share buyback.