The Tokyo stock exchange fell sharply on Tuesday. The large Japanese technology companies, in particular, were sold off due to the sell-off among American peers.
Concerns about rising inflation in the United States have resurfaced. They are sparking fears that the Federal Reserve (Fed) will have to raise interest rates faster than expected to slow the economy and price levels. Higher interest rates are bad news for stock prices, especially those in the booming tech sector.
Tokyo’s leading Nikkei plummeted 3.1 percent to finish at 28,608.59 points. Investor SoftBank, which has many interests in technology companies, was the biggest dropper with a loss of 6.5 percent. Other large Japanese tech companies such as Tokyo Electron, Advantest and TDK also fell out of favour and fell to more than 5 percent. Sony lost 3.5 percent.
The Japanese technology company cannot keep up with the high demand for the PlayStation 5 game console (PS5). The company warned a group of analysts that there would be a shortage in supplies until next year.
The other stock exchanges in the Asian region also showed significant losses due to the sell-off in the tech sector. The Hang Seng index in Hong Kong fell 1.7 percent. Chinese tech companies Alibaba and Tencent fell to 2.6 percent in Hong Kong. The South Korean tech concern Samsung lost more than 2 percent and lowered the Kospi in Seoul 1.3 percent. In Taiwan, the stock market fell nearly 4 percent, partly due to a significant price loss for chipmaker TSMC.
The main index in Shanghai was in the plus and recorded a profit of 0.4 percent in the meantime. Figures from the Chinese government showed that producer prices in the country rose by 6.8 percent in April. The increase in the prices that manufacturers charge for their products thus increased more than expected. Consumer prices increased by 0.9 percent. That was slightly less than expected.