TOKYO, May 17 (Xinhua) -- Tokyo stocks closed lower on Monday as concerns over Japan's continued struggle with COVID-19 exacerbated by its slow vaccine rollout outweighed upbeat sentiment following some U.S. shares advancing late last week.
The 225-issue Nikkei Stock Average ended down 259.64 points, or 0.92 percent, from Friday at 27,824.83. The broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 4.56 points, or 0.24 percent, to finish at 1,878.86.
Local traders said the further expansion of Japan's third state of emergency to cover three more prefectures from Sunday, as the virus shows no signs of abating during the fourth wave of infections, sparked concerns over the outlook for Japan's economic recovery from the pandemic.
"Japanese tech shares could have tracked Nasdaq's higher finish on Friday but they didn't. That means the market has negative reasons that are unique to Japan," Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities, was quoted as saying.
"The biggest reason is the slow rollout of vaccines. That weighs on business sentiment, which prompted investors to sell the Nikkei's heavyweights," said Fujito.
Naoya Oshikubo, senior manager of research at Sumitomo Mitsui Trust Asset concurred, stating "Coronavirus infections and slow vaccinations are the biggest factors. The measures that have been taken so far may not be enough in curbing variants and economic activities may have to slow down further."
Other analysts suggested the market could be set to fall further amid growing COVID-19 concerns including the Bank of Japan (BOJ) choosing not to intervene in the market's run of losses last week with the purchase of exchange-traded funds (ETF).
"The market was dented by short selling as the virus situation prompted some investors to speculate shares would fall further as the Bank of Japan refrained from buying exchange-traded funds to support the market," Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute, was quoted as saying.
"This was despite shares' three-day steep losses last week," said Suzuki.
As for the U.S. dollar-yen pairing, the dollar was quoted at 109.24-26 yen at 5:00 p.m. compared with 109.30-40 yen in New York and 109.38-39 yen at 5:00 p.m. on Friday in Tokyo.
The euro, meanwhile, fetched 1.2135-2136 dollars and 132.57-61 yen against 1.2141-2151 dollars and 132.77-87 yen in New York and 1.2114-2116 dollars and 132.51-55 yen in late Friday afternoon trade in Tokyo.
By the close of play, non-ferrous metal, marine transportation and service-oriented issues comprised those that declined the most.
Heavily weighted Nikkei components dragged down the broader market on concerns over the outlook for the domestic economic recovery from the pandemic, with SoftBank Group dropping 1.1 percent.
Fast Retailing, the operator of the Uniqlo chain of casual clothing stores, fell 1.0 percent, while Tokyo Electron slumped 3.7 percent.
Honda Motor reversed 2.7 percent, following the automaker saying the semiconductor crunch and rising costs for raw material could hamper growth this fiscal year.
On Friday, Honda said it expects a 10.3-percent drop in net profit to 590 billion yen (5.4 billion U.S. dollars) in the current business year through next March.
Issues that fell outpaced those that rose by 1,211 to 908 in the First Section, while 73 ended the day unchanged.
On the main section on Monday, 1,164.98 million shares changed hands, dropping from Friday's volume of 1,266.20 million shares.
The turnover on the first trading day of the week came to 2,459.15 billion yen (22.53 billion U.S. dollars). Enditem