Tokyo stocks closed lower yesterday, with investor sentiment dampened by a strong yen and declines on Wall Street.
The key Nikkei 225 index fell 1.15%, or 260.27 points, to 22,397.11, extending its losing streak for a fourth trading day.
The broader Topix index dropped 1.28%, or 20.08 points, to 1,549.04.
“The yen’s rise is one negative factor” although the current rates were not yet at a devastating level for Japanese exporters, said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.
“The drops in US stocks weighed more heavily on sentiment... The market would need fresh positive news to stage a rebound,” he told AFP, citing progress on developing vaccines for the new coronavirus as an example.
Wall Street stocks finished decisively lower on Tuesday as legislators in Washington appeared far apart on another round of fiscal support for the coronavirus-battered economy.
The global economic outlook also remains clouded with resurgent Covid-19 infections in Asia and Europe — on top of the already high number of new cases in the US — and new containment measures.
The dollar was hovering around 105 yen, sharply lower than the 106-107 range seen a week earlier.
The greenback was changing hands at 104.99 yen yesterday afternoon against 105.09 yen in New York Tuesday afternoon.
Investors were now waiting for earnings results of giant tech companies in the United States on Thursday as well as the outcome of the US Federal Reserve meeting to be wrapped up yesterday. “No change is expected, though (Fed chair Jerome) Powell’s press conference 30 minutes after the decision will be closely watched,” said Tapas Strickland, director of economics at National Australia Bank.
In Tokyo individual stocks trade, heavy selling hit companies with poor earnings results.
Nissan lost 10.39% to 368.1 yen and Canon plunged 13.46% to 1,797.5 yen.
ANA Holdings fell 2.62% to 2,223.5 yen as investors braced for record quarterly losses.
Industrial robot maker Fanuc sank 7.7% to 18,700 yen while McDonald’s Holdings Japan dropped 7.56% to 5,260 yen after its US parent announced sharp profit falls and plans to sell part of its stake in the Japanese unit.
China’s benchmark index posted the biggest gain in more than a week yesterday as investors bought up shares after recent slumps, while the tech-focused STAR board soared on new listings.
At the close, the Shanghai Composite index was up 2.06% at 3,294.55, its best daily performance since July 20.
The blue-chip CSI300 index was up 2.42%, the largest daily gain since last Monday, with its financial sector sub-index higher by 2.22%, the consumer staples sector up 0.82%, the real estate index up 1.12% and the healthcare sub-index up 4.04%.
The smaller Shenzhen index ended up 2.9% and the start-up board ChiNext Composite index was higher by 3.783%.
Shanghai’s tech-focused STAR 50 Index surged by 5.45% on the day, with shares of newly-listed Eyebright Medical Technology Beijing Co Ltd soared by 616.8%.
“It’s a technical rebound following the big correction last week,” said Ren Chengde, an analyst with China Galaxy Securities, adding however that there was uncertainty on the upward momentum. “Many investors are taking the wait-and-see mode in front of returned coronavirus cases and the economic impact it would bring.” 
China reported 101 new Covid-19 cases in the mainland for July 28, the highest in over three-and-a-half months, with many of the new infections coming from the far western region of Xinjiang.** The benchmark index slumped by nearly 4% last Friday, as investors fretted over an escalation in tensions between Beijing and Washington after China ordered the US to close its consulate in Chengdu in a tit-for-tat response.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.1%, while Japan’s Nikkei index closed down 1.15%. At 07:17 GMT, the yuan was quoted at 7.0028 per US dollar, 0.01% weaker than the previous close of 7.002.