Japan's Nikkei falls for third session on corporate outlook concerns
The Nikkei fell 0.79 per cent to 40,674.55. The broader Topix declined 0.75 per cent to 2,908.64.
Japan is in the middle of its earnings season, and investors are cautious as a 15 per cent tariff to be imposed on its exports to the United States could hit corporates, said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
The tariff, part of the trade deal Japan struck with the US last week, is lower than the 25 per cent that US President Donald Trump had earlier threatened to impose on the country.
That, and expectations that Prime Minister Shigeru Ishiba would step down sent the Nikkei to its highest level in a year last week, Ueno said.
"The market hoped someone who promotes measures to stimulate the economy would replace him (Shigeru Ishiba)," he said.
Ishiba vowed to remain in his post after his ruling coalition suffered a bruising defeat in upper house elections, prompting some in his own party to doubt his leadership as the opposition weighed a no-confidence motion.
On Tuesday, chip-related stocks led the decline, with Lasertec falling 8.3 per cent to become the worst performer on the Nikkei.
Tokyo Electron fell 1.2 per cent to become the biggest drag for the Nikkei. Advantest slipped 1 per cent.
Nitto Denko fell 3 per cent after the industrial materials maker posted a 16 per cent decline in quarterly operating profit.
All but seven of the Tokyo Stock Exchange's 33 industry sub-indexes fell. The auto sector lost 1.83 per cent to become the worst performer.
Bucking the trend, Nomura Research jumped 8.33 per cent after the consulting and IT solutions provider reported a 17 per cent rise in quarterly net profit.
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