TOKYO, June 30 (Xinhua) -- Tokyo stocks ended sharply lower Thursday following data here showing factory output fell the most in two years in May, with sentiment also hit by ongoing concerns over a possible recession in the United States.
The 225-issue Nikkei Stock Average dropped 411.56 points, or 1.54 percent, from Wednesday to close the day at 26,393.04.
The broader Topix index, meanwhile, lost 22.75 points, or 1.20 percent, to finish at 1,870.82.
Local dealers said data released earlier Thursday showing Japan's industrial production in May logged its steepest fall in two years amid supply issues and dented investor sentiment.
Japan's industrial output in May saw the sharpest decline in two years, sliding 7.2 percent from last month, as the auto industry was hit by COVID-19-related supply issues, the government said in a report on Thursday.
The Ministry of Economy, Trade and Industry said Thursday that the seasonally adjusted index of production at factories and mines stood at 88.3 against the 2015 base of 100, with the decline coming on the heels of a 1.5-percent retreat logged in April.
Owing to the steep decline in the recording period, which was the sharpest drop since May 2020, the ministry opted to downgrade its basic assessment of industrial production for the second consecutive month to "weakening," which hurt investor sentiment, market analysts said.
"May's weaker-than-expected industrial production cast a shadow. The market is in a position where negative factors are likely to be reflected," Kazuo Kamiya, a strategist at Nomura Securities Co., was quoted as saying.
Other strategists said recent power shortages in Tokyo and surrounding areas, as record high temperatures have led to a surge in demand for power, also triggered market concerns.
"The unexpectedly poor outcome of the data shocked the market, raising uncertainty over the production outlook amid recent power shortages in Tokyo and other areas," a Tokyo-based investment strategist was quoted as saying.
Brokers here also said U.S. Federal Reserve Chairman Jerome Powell doubling-down on the bank's aggressive interest rate hikes to combat inflation added to investor consternation and concerns over a possible recession in the world's largest economy.
By the close of play, miners, consumer credit and electric appliance issues comprised issues that declined the most, and those that fell outpaced those that rose by 1,314 to 472 on the Prime Market, while 52 ended the day unchanged.
Automakers lost ground over the market's production skepticism following the government's latest output data, and Nissan Motor skidded down 3.8 percent, while Mazda Motor reversed 0.5 percent.
Toyota Motor, meanwhile, reversed 1.3 percent by the close of play.
Energy issues came under pressure as Brent crude futures dropped, with exploration giant Inpex Corp. falling 3.6 percent.
But Sanrio, the operator of theme parks featuring Hello Kitty, marked a bright note on the market, rocketing 13.8 percent, after the firm announced a licensing agreement with a subsidiary of Alibaba Group Holding Ltd.
On the Prime Market on Thursday, 1,364.02 million shares changed hands, dropping from Wednesday's volume of 1,662.92 million shares.
The turnover on the penultimate trading day of the week came to 3,214.43 billion yen (23.58 billion U.S. dollars). ■
