TOKYO, May 19 (Reuters) - Japanese shares closed lower on Wednesday, tracking cues from Wall Street’s weak overnight finish, while domestic cyclicals lost ground as concerns over the country’s pandemic-induced economic slump weighed on investor sentiment.
The Nikkei share average dropped 1.28% to close at 28,044.45, while the broader Topix lost 0.66% to 1,895.24.
“Japanese market can’t be free from the influence of overseas markets. At the same time, Japan has its own negative factor - the government’s emergency measures to curb COVID-19 infections,” Yoshihiro Takeshige, general manager at investment management department, Asahi Life Asset Management, said.
“It is hard to find reasons for a market recovery in a short term.”
U.S. stocks closed weaker overnight, slumping on a sharp decline in telecom stocks and weak housing starts data that overshadowed better-than-expected earnings.
A jump in COVID-19 infections stoked alarm in Japan amid a shortage of medical staff and hospital beds in Tokyo, prompting a top medical organisation to call for cancellation of the Tokyo Olympics scheduled in July.
Cyclical shares took a hit, with machinery and paper sectors losing the most among the 33 sector sub-indexes on the main bourse.
Air-conditioner maker Daikin Industries fell 3.67%, construction equipment maker Komatsu lost 3.91%, while farm equipment maker Kubota slipped 3.68%.
Toyota Motor, which touched a record high in the previous session, fell 1.36% after the automaker said it would halt its production operations next month in northern Japan due to chip shortage.
Japan Steel Works gained the most on the Nikkei, rising 4.75%, followed by Kajima Corp climbing 3.46% and Nexon Co that scaled 3.14%.
Mitsui Chemicals, which dropped 5.8%, was the largest percentage loser in the index, followed by Fujikura losing 5.74% and Nippon Light Metal Holdings down by 4.94%. (Reporting by Junko Fujita, Editing by Sherry Jacob-Phillips)