Tokyo stocks close lower after US falls

Tokyo stocks closed lower on Tuesday, tracking Wall Street falls with risk-averse sentiment growing among investors over a fresh Covid-19 flare-up in China.

The benchmark Nikkei 225 index was down 1.77 per cent, or 475.64 points, to end at 26,336.66, while the broader Topix index lost 1.64 per cent, or 31.36 points, at 1,883.30.

Shares were pushed downwards by falls in the United States and Europe, where sell-offs proliferated "on concerns over a global economic downturn", Okasan Online Securities said.

This, the brokerage said, "prompted a tendency toward profit-taking selling in Tokyo".

Economic slowdown concerns largely overshadowed any hopes for political stability sparked by the strong win of Japan's ruling bloc in Sunday's upper house election, analysts said.

Meanwhile, officials in Shanghai launched another mass-testing drive after recording around 120 new coronavirus cases over the weekend, while casino centre Macau embarked on a week-long lockdown to curb its worst outbreak yet.

The dollar stood at 137.37 yen, against 137.41 yen in New York, and US Treasury Secretary Janet Yellen held talks with Japan's Finance Minister Shunichi Suzuki in Tokyo on Tuesday afternoon.

In a joint statement, they said Russia's invasion of Ukraine has "raised exchange rate volatility" and pledged to "continue to consult closely on exchange markets and cooperate as appropriate on currency issues".

SoftBank Group plunged 4.27 per cent to 5,213 yen, Sony Group trimmed 1.49 per cent to 11,210 yen and Toyota lost 1.64 per cent to 2,116.5 yen.