TOKYO, Sept. 29 (Xinhua) -- Tokyo stocks closed largely lower Wednesday, following overnight decline in U.S. shares.
The 225-issue Nikkei Stock Average closed down 639.67 points, or 2.12 percent, from Tuesday at 29,544.29.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 43.48 points, or 2.09 percent, lower at 2,038.29.
Every industry category saw a downward trend, except for air transportation issues. Major declining issues were led by precision instrument and electric appliance issues.
The 10-year U.S. Treasury yield gained overnight to 1.56 percent at one point, reaching its highest level since mid-June.
Shares fell from the beginning, tracking overnight falls on Wall Street after recent rapid increase in inflation, partly triggered by supply bottlenecks as well as rises in U.S. Treasury yields, brokers said.
The Nikkei briefly dropped more than 800 points, the largest points loss in about three months, and turned narrowly to negative territory in the afternoon as voting by LDP lawmakers started, the brokers said.
The new LDP president, elected in a runoff voting between vaccination minister Taro Kono and former Foreign Minister Fumio Kishida, will also become the next prime minister as the party controls the powerful lower house of parliament.
Kishida won the presidential election shortly after the market closed, though Kono received more backing among media polls and LDP rank-and-file members.
"Some news reporting Mr. Kishida's lead in the LDP leadership election were poorly received and contributed to the declines, as many investors believe Mr. Kono could better help the party in the lower house election" to be held this fall, said Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Research Institute.
"Mr. Kishida's economic policies raise worries about fiscal tightening such as a tax hike in the medium to long term," Sengoku said.
The Tokyo market was also under pressure from investors to sell shares of companies ex-divided on Wednesday before the end of the first half of the fiscal year on Sept. 30, brokers said.
On the First Section, decliners outnumbered advancers 1,768 to 336, while 50 finished unchanged.
Renewable energy company Renova, having increased recently on expectations of a victory by Kono, who has pushed green energy as a main power source rather than nuclear power, sank 3.1 percent.
Tokyo Electric Power Company Holdings, which operates nuclear power plants, jumped 4.1 percent.
Among issues influenced by weak U.S. shares, SoftBank Group fell 1.5 percent, Sony Group slipped 3.7 percent and Tokyo Electron tumbled 5.3 percent.
Trading volume on the main section increased to 1,602.59 million shares from Tuesday's 1,506.77 million shares. Enditem