TOKYO — Japan’s Nikkei share average on Friday was set for its first session of loss in six, tracking an overnight plunge in Wall Street as investors braced for crucial US inflation data that will guide the Federal Reserve’s policy tightening path.
The Nikkei was down 1.41% at 27,848.79 by the midday break, slipping below the psychological mark of 28,000 and retreating from a nearly five-month peak scaled on Thursday at 28,389.75.
The broader Topix lost 0.98% to 1,949.84, on track for its steepest drop in three weeks.
Overnight, the tech-heavy Nasdaq slumped 2.74% and the S&P 500 eased 2.38%, a day before the release of the US consumer price index. The market is braced for a strong reading for May, which would back the case for aggressive Federal Reserve policy tightening, even at the risk of choking economic growth.
“Investors are worried that the CPI will send US stocks lower,” with Japanese investors then not being able to react until the Monday reopen in Tokyo, said a market participant at a domestic securities company.
“It’s a day when nerves are going to be elevated,” added another market participant from a Japanese securities firm.
Growth shares including technology firms lagged, with the Topix’s growth index sliding 1.33%, versus a 0.66% drop for the value index.
Chip-making equipment maker Advantest slumped 3.73%, and bigger rival Tokyo Electron dropped 2.76%.
Heavyweights including Uniqlo store operator Fast Retailing and tech investor SoftBank Group lost ground, down 1.95% and 2.56%, respectively.
Energy shares were the Nikkei’s worst performing sector, sliding 1.8% amid a retreat in crude oil prices.
The real estate sub-index was the only sector in black, up 0.41%.
Of Nikkei’s 225 component stocks, 173 fell versus 50 that rose while two were flat.
(Reporting by Tokyo markets team; Editing by Sherry Jacob-Phillips)