The Japanese Nikkei index ended the trading session on a decline, reaching its lowest level in over two months on Wednesday, as concerns about the Chinese economy weighed on risk appetite, while bank stocks fell following a report of a potential downgrade for major U.S. banks. The Nikkei dropped 1.46% to 31,776.82 points, the lowest level since June 8, marking its largest daily decline since August 3. The broader Topix index also fell by 1.29% to 2,260.84 points.
A wide range of Chinese economic data released on Tuesday highlighted the increasing pressures on the economy from multiple fronts, prompting Beijing to cut key interest rates to boost economic activity. The banking index lost 2.29%, following declines in major U.S. banks including JPMorgan and Bank of America after a report suggested that Fitch Ratings may downgrade several U.S. banks.
Shares of Mitsubishi UFJ Financial Group fell 2.94%, and Sumitomo Mitsui Financial Group dropped 1.56%, while Mizuho Financial Group decreased by 2.12%. Fast Retailing, the owner of the Uniqlo brand, saw its stock drop by 1.87%, contributing significantly to the Nikkei's pressure. SoftBank Group's shares fell by 3.13%, and Tokyo Electron, a semiconductor manufacturing equipment firm, declined by 1.14%.
The index related to energy companies also fell, with oil refinery stocks dropping 2.79%, becoming the worst-performing sector among Tokyo's 33 sub-sectors. Stocks of energy exploration companies declined by 2.25%. However, Advantest, a test equipment manufacturer for semiconductors, countered the trend with a 1.1% increase, providing the largest support for the Nikkei.
