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Nikkei ends at 6-month low on COVID economic recovery concerns

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

TOKYO (Kyodo) -- Tokyo stocks ended lower Tuesday for the fifth consecutive trading day, with the Nikkei index closing at a six-month low, as a recent surge in Delta variant coronavirus cases fueled fears of a slowdown in global economic recovery.

    The 225-issue Nikkei Stock Average ended down 264.58 points, or 0.96 percent, from Monday at 27,388.16, the lowest level since Jan. 6. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 18.24 points, or 0.96 percent, lower at 1,888.89.

    Decliners were led by mining, real estate and nonferrous metal issues.

    The U.S. dollar remained weak in the mid-109 yen range as the currency was sold after the 10-year U.S. Treasury yield slipped to a five-month low at one point overnight, dealers said.

    At 5 p.m., the dollar fetched 109.62-63 yen compared with 109.40-50 yen in New York and 109.84-86 yen in Tokyo at 5 p.m. Monday.

    The euro was quoted at $1.1783-1784 and 129.17-21 yen against $1.1794-1804 and 129.11-21 yen in New York and $1.1779-1780 and 129.38-42 yen in Tokyo late Monday afternoon.

    The yield on the benchmark 10-year Japanese government bond dipped 0.005 percentage point from Monday's close to 0.010 percent, tracking an overnight decline in U.S. Treasury yields.

    Stocks extended losses for the fifth straight day after the Dow Jones Industrial Average overnight logged its largest point drop in about nine months, as countries across the globe, including those with high vaccination rates, struggled to contain infections of the highly contagious Delta variant.

    "Investors were concerned that a spread of the Delta variant, the principal reason for negative market sentiment, would slow down global economic recovery," said Maki Sawada, a strategist in Nomura Securities Co.'s investment content department.

    However, the drop in the Tokyo market was smaller than its U.S. counterpart as investors had priced in somewhat concerns about the Delta variant during the previous day's fall of Japanese stocks, she added.

    Market participants were also hesitant about making moves ahead of the four-day weekend in Japan, as well as the release of earnings reports beginning next week, Sawada said.

    On the First Section, declining issues outnumbered advancers 1,656 to 441, while 95 ended unchanged.

    Energy-related issues took a hit after crude oil futures plunged to their lowest levels in around two months overnight in New York trading.

    Oil prices are expected to remain subdued after the Organization of the Petroleum Exporting Countries and nonmember producers agreed to phase out output cuts and also on speculation that demand will decline due to a rapid increase in coronavirus infections, brokers said.

    Refiners Cosmo Energy Holdings dropped 103 yen, or 4.1 percent, to 2,398 yen, Eneos Holdings slumped 11.5 yen, or 2.5 percent, to 449.9 yen, while oil explorer Inpex fell 36 yen, or 4.5 percent, to 757 yen.

    Bucking the downward trend, Canon climbed 229.0 yen, or 9.2 percent, to 2,708.0 yen after the camera and electronic parts manufacturer on Monday revised upward its earnings forecast for 2021.

    Trading volume on the main section rose to 1,086.46 million shares from Monday's 951.63 million shares.

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