Japan's Nikkei falls to 6-week low on slowdown fears
TOKYO, Dec 19 (Reuters) - Japan's Nikkei share average fell to a six-week low on Monday, led by heavyweight technology stocks, after Wall Street ended lower in the previous session on fears of an economic slowdown due to the U.S. central bank's rate hikes.
The Nikkei index lost 1.11% to 27,221.29, its lowest since Nov. 4, by the midday break and is on course to post a third straight session of declines.
The broader Topix slipped 0.67% to 1,937.10.
U.S. stocks dropped for a third straight session at the end of last week and suffered a second straight week of losses as fears continued to mount that the Federal Reserve's campaign to arrest inflation would tilt the economy into a recession.
The Fed's decision last week to raise interest rates by 50 basis points (bps) was expected. But Fed Chair Jerome Powell signalled more policy tightening, and the central bank projected rates would top the 5% mark in 2023, a level not seen since 2007.
"I was bullish until the FOMC (Federal Open Market Committee) but my stance has changed after seeing the outcome of the meeting," said Takatoshi Itoshima, a strategist at Pictet Asset Management Japan.
"Gains in Japanese stocks will be limited this week as Wall Street weighs."
In Japan, chip-making equipment maker Tokyo Electron fell 1.6%, while air-conditioning maker Daikin Industries and medical equipment maker Terumo both fell 2.7%.
Lawson slipped 3% after the convenience store chain withdrew an application to list high-end supermarket chain, Seijo Ishii.
Toshiba tanked 6.2% after a report said its preferred bidder Japan Industrial Partners may lower the valuation of the company.
The banking sector rose 1.03% amid a rise in U.S. Treasury yields and Japanese government bonds. (Reporting by Junko Fujita; Editing by Savio D'Souza)
