SYDNEY, April 16 (Reuters) - Japanese shares on Thursday tracked overnight losses on the Wall Street, as economic damage from COVID-19 weighed on investor sentiment, with banks and automakers leading the declines.
The benchmark Nikkei average .N225 ended 1.3% lower at 19,290.20. The Nikkei's volatility index .JNIV , a measure of investors' volatility expectations based on option pricing and considered to be a fear gauge, rose 8.6% to 39.36.
On Wednesday, all three major U.S. stock indexes fell as the raft of weak economic data and dismal first-quarter earnings reports compounded concerns over the extent of damage from the coronavirus pandemic. .N
U.S. retail sales and manufacturing output saw sharp declines, while disappointing earnings from Bank of America Corp (NYSE: BAC ) BAC.N and Citigroup Inc (NYSE: C ) C.N added to worries about weak U.S. corporate results. a cue from this, Tokyo-listed banks fell, with Mitsubishi UFJ Financial Group (MUFG) Inc 8306.T , Sumitomo Mitsui Financial Group (SMFG) Inc 8316.T and Mizuho Financial Group Inc 8411.T shedding between 2.1% and 3.3%.
The broader Topix .TOPX fell 0.8% to 1,422.24, with two-thirds of the 33 sector sub-indexes on the Tokyo exchange finishing lower.
"We have downgraded Japan to a neutral from favour, reflecting fuller relative valuations and softer fundamentals in the current global setting," said Natasha Ebtehadj, portfolio manager at Columbia Threadneedle Investments in London.
"Although, still supported by the long-term structural improvement story of better corporate governance, Japan is a strongly cyclical and operationally leveraged market that is highly exposed to 'sudden stops' in global activity."
Toyota Motor Corp 7203.T slid 2.0% after the carmaker said it will cut production of finished vehicles at 18 plants in Japan due to the COVID-19 outbreak. Motor Co Ltd 7201.T , Honda Motor Co Ltd 7267.T and Mazda Motor Corp 7261.T lost between 3.8% and 5.2%.
JFE Holdings 5411.T fell 3.3% on news that its unit JFE Steel will temporarily halt two blast furnaces in western Japan, potentially cutting 25% of its capacity. bigger rival Nippon Steel 5401.T , which announced a similar plan earlier this month, fell 3.1% to hit its lowest level in data going back as far as 1973. the overall trend, the Nikkei's heavyweight SoftBank Group Corp 9984.T advanced 2.2% after the tech conglomerate said it re-purchased shares worth 16 billion yen ($148 million) in late-March. index of Mothers start-up shares .MTHR climbed 2.7% to 730.88, its highest close since March 5.
($1 = 107.8600 yen)
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