Japan's Nikkei Stock Average Extends Falls on Corporate Outlook Concerns
The Nikkei .N225 was down 0.7% at 40,728.48, as of 0151 GMT. The broader Topix .TOPX declined 0.75% to 2,908.75.
In the middle of the earnings season in Japan, investors are cautious about the corporate outlook, which may be hit by a 15% tariff to be imposed on Japan's exports to the United States, said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
Last week, Japan struck a trade deal that lowers the hefty tariffs U.S. President Donald Trump had threatened to impose on goods from Japan. That sent the Nikkei to its highest level in a year last week, but the gain was too much, said Ueno.
'Half of its gains came from expectations that Prime Minister (Shigeru) Ishiba would step down, and the market hoped someone who promotes measures to stimulate the economy would replace him,' he said.
Ishiba vowed to remain in his post after his ruling coalition suffered a bruising defeat in upper house elections, prompting some in his own party to doubt his leadership as the opposition weighed a no-confidence motion.
On Tuesday, chip-related stocks led the decline, with Lasertec 6920.T falling 5% to become the worst performer on the Nikkei.
Tokyo Electron 8035.T and Advantest6857.T slipped 0.49% and 0.33%, respectively.
Nitto Denko6988.T fell 4.6% after the industrial materials maker posted a 16% decline in quarterly operating profit.
All but three of the Tokyo Stock Exchange's 33 industry sub-indexes fell. The auto sector ITEQP.T lost 1.7% to become the worst performer.
Bucking the trend, Nomura Research4307.T jumped 8.9% after the consulting and IT solutions provider reported a 17% rise in quarterly net profit.
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