Japan's Nikkei share average fell on Thursday, erasing much of the previous session's gains. The yen's drop past the significant 160 per dollar mark heightened trader concerns about potential intervention.
The Nikkei .N225 ended the day down 0.82%, closing at 39,341.54.
Technology stocks underperformed, pulling the benchmark index lower after a sell-off in U.S. chipmaker Micron Technology MU.O during after-hours trading dampened investor sentiment.
The broader Topix .TOPX declined 0.33% to 2793.70. Within this index, a sub-index of growth shares .TOPXG fell 0.6%, while value shares .TOPXV saw a modest decline of 0.08%.
Investors are facing multiple risk events, including a U.S. presidential debate later in the day and the release of the Federal Reserve's preferred inflation gauge on Friday.
The yen was last trading at 160.36 per dollar JPY=EBS, after hitting 160.88 overnight, a level not seen in 38 years. A sharp drop to 160.245 in late April led to an official Japanese currency intervention worth approximately 9.8 trillion yen ($61.08 billion).
Market movements may also be influenced by the upcoming quarter-end. The Nikkei had experienced a three-day streak of strong gains, culminating in a 1.26% surge on Wednesday.
"The magnitude of yesterday's Nikkei gains was very surprising, and I'm sure I'm not alone in thinking that," said Kazuo Kamitani, an equity strategist at Nomura Securities. He added that the large trading volume suggested involvement from overseas funds or securities dealers.
The key technical challenge for the Nikkei is whether it can reclaim the May 20 high of 39,437 by the end of the week, he noted.
"If not, yesterday's rally will likely have been just an anomaly," he concluded.
Among individual stocks, chip-making equipment giant Tokyo Electron 8035.T fell 2.4%, becoming the biggest drag on the Nikkei, followed by Fast Retailing 9983.T, the parent company of Uniqlo, which declined nearly 2%.
Chip-related firm Screen Holdings 7735.T was the biggest percentage loser, plummeting 5.7%.
Paraphrasing text from "Market Screener" all rights reserved by the original author.
