TOKYO, Oct. 1 (Xinhua) -- Tokyo stocks sharply dropped on Friday after overnight losses in the U.S. market due to concern over the U.S. debt ceiling.
The 225-issue Nikkei Stock Average finished 681.59 points, or 2.31 percent, lower from Thursday at 28,771.07. It was the lowest close since Sept. 3 and declined for the fifth consecutive day.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed 43.85 points, or 2.16 percent, lower at 1,986.31, also logging the fifth decrease in the row.
Trading volume on the main section decreased to 1,384.43 million shares from Thursday's 1,551.25 million shares.
After the U.S. stocks market declined due to concerns that supply chain disruptions could dampen economic recovery, Tokyo stocks opened low in the morning and stayed in negative territory throughout the day. The Nikkei index briefly tanked more than 700 points in the afternoon and has ended below the 29,000 line for the first time since Sept. 3.
The ongoing U.S. debt crisis, as confrontations in Congress continued over raising the federal government's debt ceiling, also dragged down the market. U.S. Treasury Secretary Janet Yellen has said the country would reach its borrowing limit by Oct. 18.
Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co., said, "Although a default is somewhat unlikely, the mere possibility that it would cause chaos in the financial world is enough for investors to mitigate risks by selling."
Moreover, Kamitani said that market sentiment was lowered by the lack of positive trading clues, such as economic policies from the incoming government of Fumio Kishida, the newly elected leader of the ruling Liberal Democratic Party who is almost certain to become prime minister next week.
By the close of play, except for mining shares, all sectors ended down with wholesale trade and metal product issues leading the downward trend. Declining issues outnumbered advancing ones 1,981 to 173 on the First Section, while 20 finished unchanged.
With the yen strengthening overnight against the U.S. dollar, some exporter firms performed weakly on the day, with Electronics manufacturer Panasonic dropping 3.2 percent and Sony Group falling 3.0 percent.
After Seibu Holdings announced Thursday the downward revision of its net balance projection in May and a forecast of incurring a larger loss for the April-September period, its stock price finished down 2.6 percent.
Bucking the ground decline, the e-commerce giant Rakuten Group rose 3.2 percent after announcing its intent to list its online banking unit Rakuten Bank. Enditem