Japanese stocks fall on US inflation data

Japanese stocks hit their biggest drop in three months on Wednesday, tracking Wall Street’s overnight losses on an unexpected rise in US inflation data, while reports of the Bank of Japan’s apparent intention to intervene in the currency market weighed on sentiment.

The Nikkei index fell 2.95 percent shortly after the opening. It closed down 2.78 percent at 27,818 points, after the Nikkei newspaper reported that the Bank of Japan conducted an interest rate examination in a clear prelude to intervention in the currency market amid sharp declines in the value of the yen.

The broader Topix index closed down 1.97 percent, its worst day since June 13.

Wall Street recorded its biggest loss in two years after the US consumer price index report showed that inflation rose in August by 0.1 percent, despite expectations of a decrease.

Technology shares led losses on the Nikkei, which fell 2.59%, after the Philadelphia Semiconductor Index fell 6.18 percent overnight.

SoftBank Group fell 4.38 percent, as was Tokyo Electron for chip-making equipment 3.69 percent.

Of the 225 stocks on the Nikkei index, 208 incurred losses, 46 increased, and two settled unchanged.