TOKYO, July 16 (Reuters) - Japan's benchmark Nikkei share
average dipped below the psychologically key 28,000 mark on
Friday as tech shares tracked declines on Wall Street overnight,
while a continued surge in coronavirus infections dented
New COVID-19 infections leapt to 1,308 in Tokyo on Thursday,
the highest since January, a week before the city hosts the
Olympics, which could potentially spark a renewed surge in
infections amid the influx of foreign athletes and officials.
"New cases have already surpassed the peak of the fourth
wave in May, and we could see the number rising above the
January peak," said Norihiro Fujito, chief investment strategist
at Mitsubishi UFJ Morgan Stanley Securities.
"It is hard to expect the surge in infections to subside any
time soon, which obviously delays Japan's economic recovery.
That is what markets are pricing in now."
The tech-heavy Nikkei fell as low as 27,847.35
before closing the session 1% down at 28,003.08, tracking Nasdaq
Composite-led declines in U.S. shares.
Among components, chipmakers Advantest and Tokyo
Electron lost 2.2% and 1.6%, respectively, after rival
TSMC signalled plans to build new factories in the
United States and Japan, and expand production capacity in
Camera manufacturers Nikon Corp and Olympus
fell 2% and 1.4%, respectively, while Sony Group Corp
The Nikkei's biggest decliner was Eisai, which fell
13% after some large hospitals declined to use an Alzheimer's
drug similar to the one it developed with Biogen.
Uniqlo clothing brand-owner Fast Retailing fell
2.6% after trimming its full-year profit forecast.
The broader Topix ended the day 0.4% lower at
1,932.19. The drag from tech shares was clear with the Topix
Growth Index sliding 0.7% while the Value Index
Sony was the biggest decliner among the core 30 Topix names.
Nintendo, not included in the Nikkei, was also among
the worst performers, down 1.2%. SoftBank Group slipped
Among Topix sectors, pharmaceuticals dropped the
most, falling 1.9% mainly on account of Eisai. Precision
machinery makers were the next biggest decliners,
Investors largely shrugged off the Bank of Japan's decision
to leave stimulus settings unchanged.
(Reporting by Kevin Buckland in Tokyo; Additional reporting by
Hideyuki Sano; Editing by Vinay Dwivedi)