Tech selloff drags Japanese stocks to worst day in two weeks

By Sam Byford

Oct 11 (Reuters) – Japanese stocks posted their worst day in more than two weeks on Tuesday, as heavyweight technology shares fell after a sell-off in global markets, although travel-related companies held firm on the day Japan reopened its borders to normal tourism.

After returning to trade over the three-day weekend, Nikkei shares averaged down 2.64%. It opened well below 27,000 and managed to close losses at 26,401.25.

The broader Topix index fell 1.86%, its worst day since September 26.

Most of the index’s losses came in the morning session, with volatile afternoon yen trading little affected.

The Japanese currency fell to $145.86, its lowest since hitting $145.90 on September 22, a day that prompted the Bank of Japan to intervene to boost the currency for the first time since 1998.

The Philadelphia Semiconductor Index lost 3.5% overnight after US President Joe Biden announced new export controls last week that could hamper China’s chip-making industry.

“Washington has moved to further limit China’s access to US technology,” Saxo Bank market strategist Redmond Wong wrote in a note.

The move appears to weigh on Japanese companies involved in semiconductor production. Chip manufacturing equipment maker Tokyo Electron fell 5.49% and industrial robot maker Fanuc Corp fell 3.93%.

Electric motor maker Nidec Corp fell 9.34%, the biggest loss on Nikkei, after it allegedly engaged in improper handling of stock buybacks. The company denied the report and said it was considering legal action.

“The company seems to be tainted by allegations of stock-buying,” said a strategist at a local securities firm.

Electrical appliance maker Yaskawa Electric Corp fell 6.04% after it cut its profit guidance for the current fiscal year.

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Travel-related stocks performed well as investors expect a resumption of normal revenue tourism this week.

Department store operator Takashimaya Co. rose 3.33 percent, while East Japan Railway Co. rose 2.27 percent. Topix’s Air Travel shares rose 2.24% more than any other sector.

Of Nikkei’s 225 components, 185 posted losses, 35 advanced and five traded flat. (Reporting by Sam Byford and the Tokyo Markets team; Editing by Uttaresh.V)