TOKYO: Japan's Nikkei slumped on Friday amid renewed concerns over U.S. rate ​hikes and a surge in oil prices that fuelled inflation worries.

The benchmark Nikkei 225 gauge fell 1.93% to close at 64,011.34, giving it a 0.4% decline on the week. The gauge earlier sank as much ‌as 3.16%. ‌The broader Topix ​slipped 0.65% ‌to ⁠4,028.30.

U.S. ​equities retreated ⁠overnight as higher Treasury yields and August producer-price data heightened expectations for a Federal Reserve rate hike. Fed Chair Kevin Warsh has signalled a shift away from forward guidance, keeping investors ⁠alert to upcoming inflation figures. Meanwhile, ‌geopolitical tensions persisted ‌as the U.S.-Iran confrontation ​continued to disrupt energy ‌markets.

"With Fed Chair Warsh signalling ‌a focus on curbing inflation, a wait-and-see stance is likely to strengthen in the Japanese stock market," Takuma Ikemoto, market analyst at ‌Tokai Tokyo Intelligence Lab, said in a note.

Technology and AI-related ⁠shares ⁠led the Nikkei lower. There were 95 advancers on the gauge against 128 decliners and two unchanged.

The largest losers were Resonac Holdings, down 10.68%, followed by Kioxia Holdings, 6.99% lower, and Toppan Holdings, which lost 6.95%.

The largest gainers were LY, up 3.44%, followed by Kawasaki Kisen Kaisha, 2.94% higher, ​and Dai-Ichi ​Life Holdings, which gained 2.73%.

Reuters