Written by Kevin Buckland
TOKYO (Reuters) – Japan's Nikkei stock average fell more than 2% to a three-week low on Friday, pushing for its worst week since December 2022 as tech stocks led Wall Street in declines. It is expected that this will happen.
The outlook for when the Federal Reserve will cut interest rates has become more uncertain this week, and investors have grown cautious ahead of the important monthly U.S. jobs report due later in the day.
The Nikkei Stock Average had fallen 2.42% (961 points) to 38,812.24 as of the noon break, bringing the week's decline rate to 3.86%.
Kazuo Uetani, equity strategist at Nomura Securities, said, “The biggest factor behind the Nikkei average decline is technical.''
The benchmark index was poised for its second weekly decline after rising to a record high of 41,087.75 on March 22.
The 25-day moving average began to decline on Friday, but if this trend continues, “there is a risk that the Nikkei Stock Average will fall further from here,” he said.
“The 25-day moving average has a mysterious gravitational pull, and the market is paying a lot of attention to it,” Kamiya added. “Stock market movements could be a little volatile over the next week.”
Chip sector stocks were the biggest drag on Friday, with Tokyo Electron dropping nearly 5% and sending the Nikkei average down 192 points. Advantest erased another 78 points with a 4.7% decline.
Other notable decliners included emerging investor SoftBank Group, which fell 3.35%, and Uniqlo chain operator Fast Retailing, which fell 2.5%.
Of the 225 Nikkei Stock Averages, 214 stocks fell, and only 11 stocks rose.
The broader Topix fell 1.81%, value stocks fell 1.6%, while the growth stocks sub-index fell 2.05%.
Energy stocks were the only bright spot in the Nikkei sector, rising 0.73% after crude oil closed above $90 for the first time since October last year. [O/R]
Oil refiner INPEX rose 1.3%, the biggest gainer on the Nikkei Stock Average.
(Reporting by Kevin Buckland; Editing by Sherry Jacob-Phillips)
