Japanese stocks recorded their largest daily decline in percentage terms this year, as caution spread across Asian markets following an unexpected credit rating downgrade for the United States, negatively affecting market sentiment. The Nikkei index fell by 2.30% to close at 32,707.69 points, marking its largest daily drop since December 20, while the broader Topix index decreased by 1.54% to 2,301.26 points.
On Tuesday, Fitch Ratings downgraded the U.S. credit rating to AA+ from AAA, a move that angered the White House and surprised investors, despite a resolution reached two months ago regarding the debt ceiling crisis. The broader MSCI index for stocks in Asia and the Pacific outside of Japan slid by 2%, heading toward its worst daily performance since February.
In Japan, shares of Tokyo Electron, a semiconductor manufacturer, dropped by 3.12%, and shares of Advantest, a chip testing equipment producer, fell by 4.48%. Nomura Holdings' shares plummeted by 8%, marking the largest daily decline since March 2021, despite Japan's largest brokerage reporting a surge in net profits for the first quarter. This decline led to a roughly 5% decrease in the brokerage sector index, making it the worst-performing among sub-indices on the Tokyo Stock Exchange.
