TOKYO, June 17 (Xinhua) -- Tokyo stocks ended lower Friday, with the benchmark Nikkei stock index closing at one-month low following Wall Street's overnight drop on concerns of economic growth prospects amid central banks' monetary tightening.
The 225-issue Nikkei Stock Average lost 468.20 points, or 1.77 percent, from Thursday to close the day at 25,963.00, marking its lowest closing level since May 12.
The broader Topix index, meanwhile, dropped 31.91 points, or 1.71 percent, to finish at 1,835.90.
Local brokers said that following a broad selloff on Wall Street overnight, investor sentiment was dampened over global economic growth concerns as central banks move to hike interest rates to combat inflation.
The U.S. Federal Reserve decided on a 0.75-percentage point rate hike on Wednesday, marking the largest hike since 1994.
In the United States, May's consumer prices showed that inflation in the world's largest economy was showing no signs of slowing, which in part informed the Fed's decision.
The Bank of England and Swiss National Bank, in moves similar to the Fed, have also raised their key interest rates to combat soaring inflation. The European Central Bank, meanwhile, is expected to follow suit next month.
"Going forward, the market's focus will be shifted to economic indicators from central banks' policy tightening. Investors will be sensitive to any negative signs for the economy," Shigetoshi Kamada, general manager at the research department at Tachibana Securities, was quoted as saying.
Other analysts said that monetary policy tightening by central banks had triggered concerns about recessions, which would hurt Japan, an economy still heavily-reliant on exports.
"Market participants are becoming more worried about recession rather than an economic slowdown caused by aggressive monetary tightening," Shingo Ide, chief equity strategist at the NLI Research Institute, said.
Conversely, the Bank of Japan (BOJ) on Friday opted to maintained its ultra-easy monetary policy despite rising inflation and the yen's recent weakness amid widening interest rate gaps with other central banks.
The BOJ has remained steadfast to maintain its ultra-loose monetary policy and has suggested that recent inflationary pressure that has triggered other countries' central banks to hike their rates is temporary.
Economists, however, have said the BOJ's policy doesn't reflect the resource-poor country's economic fundamentals, including the fact that wages here have remained stagnant despite soaring costs for energy imports and raw materials, which will impact consumption.
As other central banks have or will move to hike their interest rates, with the interest rate gulf between the BOJ and its peers widening and triggering the yen's rapid depreciation, the government has surreptitiously urged the bank to take action, analysts have pointed out.
The yen briefly tumbled below 134 against the U.S. dollar as the BOJ's decision was announced.
By the close of play, precision instrument, iron and steel, and transportation equipment issues comprised those that declined the most, and issues that fell outpaced those that rose by 1,447 to 351 on the Prime Market, while 40 ended the day unchanged.
Heavily-weighted technology-oriented issues led declines on the Nikkei, with tech investor SoftBank Group dropping 4.2 percent, while Tokyo Electron fell 5 percent. Advantest, meanwhile, ended the day 4.1 percent lower.
Automakers lost ground, with Toyota Motor skidding down 3.6 percent, after announcing it had cut its global output plan for June due to supply chain and COVID-19-related issues.
Honda Motor reversed 2.7 percent, while auto parts maker Denso dropped 4.7 percent.
On the Prime Market on Friday, 1,869.65 million shares changed hands, dropping from Thursday's volume of 1,130.69 million shares.
The turnover on the final trading day of the week came to 4,272.13 billion yen (31.70 billion U.S. dollars). ■