Japanese shares fell on Thursday as risk appetite was curbed by worries surrounding Ukraine, while investors remained concerned over rising interest rates globally to contain broadening inflationary pressures.

The Nikkei share average lost 0.83% to close at 27,232.87, while the broader Topix slipped 0.79% to 1,931.24. The Nikkei had gained 2.2% on Wednesday.

Selling accelerated after a news report that Russian-backed separatists in eastern Ukraine accused government forces of opening fire on their territory four times in the last 24 hours.

“The Ukraine situation remains uncertain. The market rose yesterday as tensions eased between Russia and Ukraine. Today, investors sold stocks again,” said Ikuo Mitsui, a fund manager at Aizawa Securities.

“Also, amid rising prices globally, investors are wondering how much central banks would need to tighten their monetary policies and what the effect of that would be on the economy.”

Staffing agency Recruit Holdings dragged down the Nikkei the most with a 5.76% drop, followed by Uniqlo clothing brand owner Fast Retailing, which fell 1.13%. Technology investor SoftBank Group lost 2.27%.

As Japan’s new COVID-19 infections have started falling, shares of companies that would benefit from a reopening gained, with railways and airlines rising 0.03% and 0.89%, respectively.

Keisei Electric Railway, which runs trains between Tokyo and the Narita airport, gained 2.47% and West Japan Railway rose 0.89%.

Reuters