Japanese shares fall as recession fears resurface
Japanese shares fell on Tuesday, following the prior session's gains after the weekend's upper house election, as rising domestic cases of Covid-19 raised worries of a recession.
Stocks had risen on Monday, outperforming the rest of the region, as the Japanese government's ruling coalition secured a strong result.
Japan's Nikkei share average was down 1.68% at 26,362.76 as the morning trading session ended.
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The index was down 2.58% from the previous session's high of 27,062.17 and trading 0.58% lower than its Friday close when markets were rocked by the shooting of former Prime Minister Shinzo Abe.
A domestic securities broker said that the market was overbought on Monday despite the absence of any positive external factors.
The broader Topix lost 1.46% on Tuesday.
"The increased spread of Covid-19 has strengthened fears of a global recession," said a market participant at a domestic securities firm.
"Given this situation, Japanese stocks, which are largely economically sensitive, are inevitably going to weaken."
Japan reported 54,993 cases on Monday, according to official government data, up from 16,791 a week earlier.
Of the Nikkei's 225 components, 202 fell, two were flat, and only 21 gained.
Tech and manufacturing stocks weighed on the index, with electronics components manufacturer TDK 6762.T falling the most, down 6.12% drop.
Industrial robotics manufacturers Fanuc Corp and Yaskawa Electric Corp also saw significant losses, as did SoftBank Group Corp and Casio Computer Co Ltd.
The only Nikkei sector to see gains was utilities, up 0.43%.
Food products company Nippon Suisan Kaisha Ltd was the best performer on the index, gaining 3.77%.
Video games companies Konami Group Corp and Nintendo Co Ltd also saw gains, up 2.82% and 0.49%, respectively.
