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Nikkei briefly dives 3% in morning after tech names drop on Wall St.

This file photo shows the Tokyo Stock Exchange. (Mainichi)

TOKYO (Kyodo) -- Tokyo stocks dropped Friday morning, with the Nikkei logging its largest intraday loss since April 1, following an overnight tumble on Wall Street led by big-name technology firms.

    The 225-issue Nikkei Stock Average sank 722.10 points, or 2.39 percent, from Thursday to 29,446.17. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 37.05 points, or 1.92 percent, at 1,889.18.

    Decliners were led by real estate, electric appliance and glass and ceramics product issues.

    The U.S. dollar edged down to the upper 105 yen range as traders fled to the perceived safety of the yen as Tokyo stocks fell.

    At noon, the dollar fetched 105.97-98 yen compared with 106.19-29 yen in New York and 106.00-02 yen in Tokyo at 5 p.m. Thursday.

    The euro was quoted at $1.2172-2173 and 128.98-99 yen against $1.2170-2180 and 129.22-32 yen in New York and $1.2186-2188 and 129.17-21 yen in Tokyo late Thursday afternoon.

    Tracking U.S. long-term interest rates hitting a one-year high overnight, the yield on the benchmark 10-year Japanese government bond briefly rose to 0.175 percent before ending the morning at 0.165 percent, its highest levels since Jan. 29, 2016, when the Bank of Japan decided to adopt a negative interest rate.

    Shares sank from the outset, with the Nikkei briefly losing over 900 points, or 3 percent, as a wide range of shares met heavy selling.

    "As share prices have risen only on speculation to a level that does not reflect the actual economy, this much swing (in Tokyo stocks) can be triggered when such speculation wavers," said Shingo Ide, chief equity strategist at NLI Research Institute.

    Stock prices around the world have been lifted largely by central banks implementing massive monetary easing policies, such as keeping interest rates to near zero, to support economies battered by the coronavirus pandemic.

    Thus overnight sharp rises in U.S. Treasury yields and drops in U.S. shares triggered selling in the Tokyo market, Ide said. He added higher bond yields make riskier stocks, such as high-tech shares that have surged largely amid the pandemic, less attractive.

    On the First Section, declining issues outnumbered advancers 1,727 to 392, while 75 ended the morning unchanged.

    Among high-tech shares, semiconductor-related companies were notably lower.

    Tokyo Electron fell 1,240 yen, or 2.7 percent, to 44,460 yen, Screen Holdings plunged 440 yen, or 5.0 percent, to 8,440 yen and Taiyo Yuden sank 200 yen, or 3.6 percent, to 5,390 yen.

    Bucking the downward trend, Dai-ichi Life Holdings rose 17.00 percent, or 0.9 percent, to 1,906.50 yen on rising U.S. long-term interest rates.

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