Japan’s Nikkei trails Wall Street lower on concerns over US economy

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TOKYO — Japan’s Nikkei index erased early gains to trade lower on Friday, trailing overnight losses on Wall Street, as investors worried about an economic slowdown in the United States.

The Nikkei stock average fell 0.88% to 26,159.53 at the midday break and is expected to post a weekly loss of 1.2%.

The broader Topix slipped 0.71% to 1,857.49, on track to fall 0.5% for the week.

« Investors were concerned about the outlook for the US economy, » said Shoichi Arisawa, managing director of the investment research department at IwaiCosmo Securities.

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Wall Street ended lower overnight, with the benchmark S&P 500 index posting its biggest percentage drop in the first six months since 1970, amid concerns over the Ukraine-Russia war, surging inflation, rising interest rates and, more recently, a possible US recession.

In Japan, heavyweights fell, with Uniqlo owner Fast Retailing losing 2.12% and chip-making equipment maker Tokyo Electron losing 3.52%.

Mitsubishi Corp fell 5% and dragged the Topix the most and its counterpart Mitsui & Co lost 5.5%.

Russia will create a company that would take over all the rights and obligations of the Sakhalin Energy Investment Company, a consortium half-owned by the two trading companies and Shell.

“News of the Sakhalin project rights also rattled investor sentiment,” Arisawa said.

Travel-related stocks were weak, along with airlines. and railways losing 1.74% and 0.45% respectively, amid recent increases in the number of domestic COVID-19 cases. The real estate sector lost 0.05%.

Department store shares rose, with Takashimaya up 9.77% and J.Front Retailing up 3.28%, after their profits turned positive last quarter.

(Reporting by Junko Fujita; Editing by Rashmi Aich)