Tokyo, :Tokyo stocks plunged more than 2.8 percent on Thursday over rekindled speculation that the US Federal Reserve may start tightening monetary policy sooner than expected.
The benchmark Nikkei 225 index gave up 2.88 percent, or 844.29 points, at 28,487.87, while the broader Topix index lost 2.07 percent, or 42.26 points, to 1,997.01.
The dollar stood at 115.85 yen, off from 116.04 yen in New York late Wednesday.
Japanese shares began the day with falls “after US shares dropped following minutes of the FOMC (Federal Open Market Committee) meeting that prompted expectations the Fed will accelerate the normalisation of monetary policy,” senior market analyst Toshiyuki Kanayama of Monex said.
The Fed’s minutes from its December policy meeting showed central bankers saying “it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated.”
It triggered US yields to rise and Wall Street to sag, weighing on the Tokyo market, SMBC Nikko Securities said in a note.
Market players were shifting their focus to the US earnings season starting next week, which could provide clues to Japanese corporate performances.
Among major Tokyo shares, Uniqlo operator Fast Retailing fell 4.89 percent to 60,880 yen after the firm reported falling December sales due to warm weather.
Sony Group plunged 6.89 percent to 14,455 yen after two days of rallies, and after it announced on Wednesday it would explore entering the rapidly growing electric vehicle market.
Toyota gave up earlier gains and ended down 0.33 percent at 2,284.5 yen, as did Honda, which fell 0.23 percent to 3,408 yen.
High-tech investor SoftBank Group lost 0.89 percent at 5,372 yen, and chip-testing equipment maker Advantest dropped 4.43 percent at 10,780 yen.
