TOKYO, Dec 17 (Reuters) - Japanese shares fell on Friday to
erase most gains made in the previous session, as investors
turned cautious about rate increase after the U.S. and British
central banks took hawkish steps, while fears over the Omicron
coronavirus variant hit travel-related stocks.
The Nikkei share average lost 1.79% to close at
28,545.68, after rising more than 2% on Thursday. The index
edged up 0.38% for the week.
The broader Topix lost 1.42% to 1,984.47 but posted
a 0.46% gain.
"Today's decline is a natural reaction to the Fed's
monetary tightening. The market jumped yesterday because those
who had shorted Japanese shares bought back stocks," said
Tomoichiro Kubota, senior market analyst at Matsui Securities.
"Towards the end of the year, investors will remain largely
cautious about the monetary tightening."
On Wednesday, the Fed said it would accelerate a tapering of
its bond-buying stimulus to end the program in March, setting up
three quarter-point rate increases next year.
The Bank of England overnight also surprised markets by
becoming the first major global central bank to raise interest
In Japan, technology shares tracked sharp overnight losses
in U.S. peers on Nasdaq, with chip-related Tokyo Electron
leading Nikkei declines, losing 3.18%.
Air-conditioning maker Daikin Industries fell 2.59%
and technology investor SoftBank Group 2.87%.
Travel-related shares were hit after a report on the first
case of a domestically-acquired Omicron infection.
Airlines and railways lost 1.26% and
1.49%, respectively. Oriental Land, the operator of the
Tokyo Disney Resort, lost 4.4%.
(Editing by Rashmi Aich)