The Japanese stock market experienced a significant downturn on Wednesday, extending the minor losses seen in the previous session, influenced by broadly negative cues from Wall Street overnight. The Nikkei 225 index dropped over 3 percent, falling below the 37,500 mark, with notable losses across all sectors, particularly among index heavyweights and technology stocks.
The benchmark Nikkei 225 Index decreased by 1,211.39 points, or 3.13 percent, to close at 37,474.92, after earlier hitting a low of 37,122.33. On Tuesday, Japanese stocks had ended with slight declines.
Major market player SoftBank Group saw its shares tumble by 6.5 percent, while Fast Retailing, the operator of Uniqlo, declined by over 2 percent. In the automotive sector, Honda lost nearly 4 percent, and Toyota saw a drop exceeding 2 percent.
In the technology sector, Advantest plummeted by more than 9 percent, Screen Holdings slipped almost 8 percent, and Tokyo Electron slid more than 7 percent.
The banking sector was also hit hard, with Mizuho Financial and Sumitomo Mitsui Financial each losing over 4 percent, and Mitsubishi UFJ Financial down nearly 4 percent.
Among major exporters, Canon and Sony each fell by more than 2 percent, while Panasonic decreased by almost 2 percent and Mitsubishi Electric declined by nearly 4 percent.
Other significant decliners included Socionext and Renesas Electronics, both plummeting over 9 percent, with Furukawa Electric, Disco, and Fujikura each plunging more than 7 percent. Tokyo Electric Power and Shin-Etsu Chemical also saw declines of nearly 7 percent each, while Yokogawa Electric, IHI, Hitachi, and Japan Steel Works lost more than 6 percent each.
Conversely, there were no notable gainers.
In terms of economic news, Japan's services sector continued its expansion in August at a steady pace, as per the latest survey from Jibun Bank, which recorded a services PMI score of 53.7—unchanged from July and above the 50-point threshold separating growth from contraction.
In the currency market, the U.S. dollar traded in the lower 145 yen range on Wednesday.
On Wall Street, Tuesday saw a sharp decline in stocks, with major averages offsetting the strong gains from the previous Friday. The Dow Jones sharply retreated from the record closing high it set in the prior session.
Although the major averages recovered somewhat from their worst levels late in the day, they still posted significant losses. The Nasdaq plunged by 577.33 points, or 3.3 percent, to 17,136.30. The S&P 500 dropped 119.47 points, or 2.1 percent, to 5,528.93 and the Dow fell by 626.15 points, or 1.5 percent, to 40,936.93.
The major European markets also saw notable declines. The German DAX Index fell by 1.0 percent, the French CAC 40 Index slid by 0.9 percent, and the U.K.'s FTSE 100 Index dropped by 0.8 percent.
Crude oil prices fell sharply to a nine-month low on Tuesday. The prospect of oversupply from OPEC weighed on prices, with West Texas Intermediate Crude oil futures for October ending down by $3.21 or 4.4 percent, at $70.34 a barrel.
