Japan Shares Drop as Sentiment Hurt by a New Wave of COVID-19

Japanese shares fell on Friday for the third straight session, as a rise in new cases with the Coronavirus inside the country to record levels fueled fears that officials will introduce new restrictions on business activities.

The Nikkei index fell 0.42% to close at 25,527.37 points. The broader TOPIX index erased session losses, closing up 0.06% to 1,727.39 points.

The Nikkei rose 0.6% in the week after hitting a 29-year high on Tuesday as progress in developing a vaccine for the Coronavirus pushed stocks higher.

But optimism has quickly faded, as a sharp increase in Covid-19 infections indicates that Japan’s economy may weaken before a vaccine becomes widely available.

The authorities in the United States and Europe are applying new restrictions to slow another wave of Coronavirus, which analysts say is another reason to profit from the rise in global stocks from the lows recorded in March.

Daikin Industries was among the lowest-performing stocks on the Topix-30 index, down 2.64%, followed by Tokyo Marine Holdings, which lost 2.52%.

Air conditioner maker Daikin took a hit after the Nikkei newspaper reported that electric car maker Tesla was considering making home air conditioners.

SoftBank Group shares were among the stocks that rose the most among the 30 main stocks on the Topix index, as it rose 2.62%, followed by Murata Manufacturing, which rose 1.48%.

Hitachi Metals jumped 9.88% after Nikkei reported that its parent company, Hitachi, had begun accepting offers to buy the metals company.

100 shares advanced on the Nikkei index, against a decline of 119.