TOKYO, Jan. 4 (Xinhua) -- Japan's benchmark Nikkei stock index ended the first trading session of 2023 at a 10-month low on Wednesday, tracking overnight losses on Wall Street, with the yen's strength hurting exporter issues.
The 225-issue Nikkei Stock Average lost 377.64 points, or 1.45 percent, from Friday to end the day at 25,716.86, marking its lowest closing level since March 15.
The broader Topix index, meanwhile, fell 23.56 points, or 1.25 percent, to finish at 1,868.15.
Local brokers said that rather than stocks rising on the first trading day of the year as some investors expected, caution prevailed as U.S. stocks retreated overnight, sending the Nikkei below the psychologically important 26,000 level.
In addition to a firm yen weighing on exporters, they added that concerns the Bank of Japan may further depart from its ultra-loose monetary policy to combat inflation, following a surprise tweak to its policy in December that took markets by surprise, weighed on sentiment.
"Some investors thought stocks would rise with the festive mood because today was the first trading day of the year but it didn't go as they had expected," Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., was quoted as saying.
"So they were cautiously watching how the market moves after selling some of their holdings that rose recently," Horiuchi added.
Mining and precision instrument issues comprised notable decliners, with heavily weighted components weighing on the broader market.
Among these, Uniqlo clothing store operator Fast Retailing dropped 1.2 percent, while chip-oriented bellwethers Tokyo Electron and Advantest fell 1.2 and 2.5 percent, respectively, on concerns over a global economic slowdown.
Other growth shares declined on similar woes, with oil exploration giant Inpex slumping 4.2 percent, while shipping firm Nippon Yusen sank 6.5 percent by the close.
Maki Sawada, a strategist at Nomura Securities, was quoted as saying that in twine with Wall Street's decline, sentiment was also dented by the yen's gain versus the U.S. dollar.
Exporters in particular rely on a weak yen to boost profits when repatriated and for price competitiveness in overseas markets.
Among exporters losing ground on the yen's strength, Mazda Motor skidded down 3.0 percent, while Mitsubishi Motors reversed 5.5 percent.
Financial stocks gained traction, however, with megabanks Mizuho Financial Group and Mitsubishi UFJ Financial Group advancing 3.0 percent and 4.2 percent, respectively.
Issues that fell outpaced those that rose by 1,584 to 213, while 41 ended the day unchanged.
On the Prime Market on Wednesday, 1,244.87 million shares changed hands, rising from Friday's volume of 881.80 million shares.
The turnover on the first trading day of the year came to 2,762.87 billion yen (21.19 billion U.S. dollars).
Markets here were closed Monday and Tuesday for the New Year holidays. ■