Japanese shares ended lower on Friday, dragged down by Wall Street’s weakness, while investors extended a sell-off to lock in profits after sharp gains last month.

The Nikkei share average fell 0.56% to close at 27,665.98 and lost 1.7% for the week. The broader Topix edged down 0.11% to 1,944.27 and posted a 1.8% weekly loss.

“Investors tend to sell stocks at the beginning of a new fiscal year to book profits so that they can feel comfortable having cash available in the new year,” said Shoichi Arisawa, general manager at the investment research department at IwaiCosmo Securities.

Overnight, U.S. stocks slumped to close out the first quarter with its biggest quarterly decline in two years, as concerns persisted about the continuing conflict in Ukraine, its inflationary effect on prices and the Federal Reserve’s response.

The Nikkei also marked the worst quarterly loss in two years. But, the index posted its biggest jump in March since November 2020 — adding 4.88% — after falling to its lowest level since that month.

Chip-related shares dragged the Nikkei index lower on Friday, with Tokyo Electron losing 2.48% and Advantest falling 1.76%. Uniqlo clothing shop operator Fast Retailing fell 1.14%.

Denting sentiment further, the nation’s business confidence worsened for the first time in nearly two years in the first quarter as companies were hit by supply disruptions and surging raw material costs caused by the Ukraine crisis.

Bucking the trend, Toshiba surged 6.45% after private equity firm Bain Capital sounded out multiple shareholders of Toshiba about a possible offer for the Japanese conglomerate.

There were 86 advancers on the Nikkei index against 136 decliners. The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.19 billion, compared to the average of 1.37 billion in the past 30 days.

Reuters