Tokyo shares end lower on weak U.S. stock futures, virus spike

Tokyo shares erased earlier gains and ended lower Tuesday as investor sentiment was dented by a fall in U.S. stock futures and a recent spike in coronavirus infections in Japan.
The 225-issue Nikkei Stock Average ended down 76.27 points, or 0.27 percent, from Monday at 28,257.25. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 8.33 points, or 0.42 percent, lower at 1,978.38.
Decliners were led by iron and steel, pulp and paper, and rubber product issues.
The U.S. dollar rose to the upper 114 yen range as investors unloaded the Japanese currency, seen as a safe-haven asset, after the Bank of Japan decided to maintain its ultraloose monetary policy during its two-day meeting that ended Tuesday.
Tokyo stocks opened higher, tracking overnight advances in European markets, while many investors took a wait-and-see approach before the outcome of the BOJ's policy meeting was released after morning trading.
However, shares slid into negative territory in the afternoon after sentiment was dented by a decline in U.S. stock futures, with investors growing cautious about a rise in long-term U.S. Treasury yields, brokers said.
"A drop in U.S. stock futures triggered selling, after investors were relieved that the BOJ's outcome was not as hawkish as they had expected," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
Meanwhile, rising coronavirus infections in Japan, triggered by the highly contagious Omicron variant, continued to pressure the market. The Japanese government has been preparing to declare a quasi-state of emergency for Tokyo and a number of other prefectures.
Air transportation issues were sold on concern that people will refrain from traveling. Japan Airlines dropped 20 yen, or 0.9 percent, to 2,141 yen, while ANA Holdings fell 9 yen, or 0.4 percent, to 2,392.5 yen.
At the Tokyo Commodity Exchange, Middle East crude oil futures rose to 58,450 yen per liter, the highest level since November 2014. Oil explorer Inpex advanced 19 yen, or 1.7 percent, to 1,142 yen and refiner Eneos Holdings rose 3.7 yen, or 0.8 percent, to 463.4 yen.
On the First Section, declining issues outnumbered advancers 1,557 to 538, while 89 ended unchanged.
Trading volume on the main section rose to 1,226.57 million shares from Monday's 995.87 million shares.

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