TOKYO, June 14 (Xinhua) -- Tokyo stocks closed lower for a third straight day Tuesday amid concerns over economic growth as the U.S. Federal Reserve may be poised to become more aggressive with its rate hikes to tackle inflation.
The 225-issue Nikkei Stock Average dropped 357.58 points, or 1.32 percent, from Monday to close the day at 26,629.86.
The broader Topix index, meanwhile, lost 22.61 points, or 1.19 percent, to finish at 1,878.45.
Dealers here said that data released late last week showing that inflation in the U.S. is showing no signs of letting up continued to dent investor sentiment here.
"Investors are starting to view a 0.75 percentage point hike as a certainty for July, as they priced in the possibility at a slightly excessive pace," Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Research Institute, was quoted as saying.
Sengoku said that further aggressive tightening by the Fed could negatively impact economic growth in the U.S., which in turn could see demand for Japanese goods drop.
Other market analysts said that investors were, in fact, "bracing for 150 basis points of rate hikes over two meetings by the Federal Open Market Committee."
The first meeting ends on Wednesday and the following meeting will take place next month.
"Right before the FOMC is a very difficult backdrop for growth stocks," a market participant at a domestic securities company, was quoted as saying.
By the close of play, air transportation, precision instrument and real estate issues comprised those that declined the most, with issues that fell outpacing those that rose by 1,403 to 382 on the Prime Market, while 53 ended the day unchanged.
Technology issues were dragged down by the Nasdaq's tumble overnight, with Tokyo Electron the biggest loser on the Nikkei slumping 2.8 percent, while Sumco lost 0.8 percent.
Industrial robotics maker Fanuc was a notable loser, slipping 0.7 percent, while Kyocera ended the day 0.8 percent lower.
Heavily-weighted Nikkei component tech startup investor SoftBank Group also weighed on the market, falling 2.6 percent by the close.
Travel-oriented issues came under pressure, with travel agency H.I.S. plunging 6.8 percent, after announcing its net loss had increased compared to a year earlier in the November-April business period, due to demand still being affected by COVID-19 restrictions.
Meanwhile, ANA Holdings dropped 3.6 percent, while rival Japan Airlines dropped 2.8 percent by the closing bell.
On the Prime Market on Tuesday, 1,260.90 million shares changed hands, rising from Monday's volume of 1,218.59 million shares.
The turnover on the second trading day of the week came to 3,033.31 billion yen (22.60 billion U.S. dollars). ■