Tokyo stocks closed lower Wednesday, extending US losses as investors remained wary about the pace of Federal Reserve rate hikes to fight inflation.

The benchmark Nikkei 225 index lost 0.37 percent, or 104.05 points, to 28,091.53, while the broader Topix index gave up 0.27 percent, or 5.22 points, to 1,963.16.

The dollar stood at 138.45 yen, against 138.66 yen in New York late Tuesday.

Japanese shares were in negative territory from the opening bell, weighed down by the falls on Wall Street.

Traders are concerned that the Fed’s aggressive fight against inflation could cause the US economy to slow down and fall into a recession, analysts said.

Tourism-related shares were snapped up, however, after Japanese Prime Minister Fumio Kishida announced a plan to further relax border controls and raise the daily cap on the number of people allowed to enter the country to 50,000.

“Oil prices fell, which dragged down energy shares including mining, oil, coal and trading companies,” SMBC Nikko Securities said.

But at the same time, Kishida’s announcement that tourists will be able to visit Japan from next week on package tours without a guide “encouraged the buying of travel and leisure related shares”, the brokerage added.

Bargain-hunting helped the Nikkei index trim early losses, Okasan Online Securities noted.

Energy developer Inpex gave up 3.55 percent to 1,604 yen and JGC Holdings, which builds energy plants, lost 2.38 percent to 1,884 yen.

Trading house Mitsui & Co. ended down 2.80 percent at 3,266 yen after it said it had received approval from the Russian government to remain part of the Sakhalin II gas project.

Fellow trading firm Mitsubishi Corp, which will also be allowed to stay on the project, fell 1.53 percent to 4,564 yen.

Meanwhile, airline ANA Holdings added 1.17 percent to 2,687.5 yen, while rival Japan Airlines rose 1.30 percent to 2,574 yen.

Sony fell 1.68 percent to 11,135 yen and SoftBank slipped 0.47 percent to 5,562 yen. Chip-testing equipment maker Advantest ended down 0.87 percent at 8,000 yen.

AFP