Japan Stocks Plummet After a Chip Plant Fire

Japanese stocks plunged as carmakers were hit after a fire broke out at a factory owned by a semiconductor supplier Renesas Electronics, sparking fears that vehicle production would be hit by further shortages of chips.

The Nikkei continued to perform below the level of the broader market after the Bank of Japan said on Friday that it would no longer buy into index funds linked to the Nikkei.

The Nikkei fell 2.07% to close at 29,174.15 points, the biggest drop since March 4.

The broader Topix index ended an eight-day winning streak, shedding 1.09% to close at 1,990.18.

Renesas shares fell as much as 4.89% after the large semiconductor supplier to the auto sector said production at its fire-damaged plant would take at least a month to resume, and that carmakers would start to be hit by a shortage of imports in about a month.

The transport equipment index recorded the largest decline in the market, followed by the insurance sector.

Honda Motor was down 3.63%, while Nissan Motor was down 3.7%. Auto component maker Denso lost 4.94%, and Toyota Motor fell 3.26%.

Stocks that have significant Nikkei weights continued to suffer as a result of the Bank of Japan’s decision to buy into index funds linked only to Topics.

Fast retailer fell 4.54% and Daikin fell 4.02%.