The Nikkei Stock Average shed up to 157.85 points, or 1.7%, to close at 9381.60 on Wednesday amid rising concerns about the economy and after unexpected interest rate hike by China.
Commodities prices took a beating as China increased its interest rate for the first time in three years, causing the Nikkei Stock Average to hit a two-week low after a minor rise of 0.4% on Tuesday.
The Topix index of all the Tokyo Stock Exchange First Section issues also lost 10.04 points, or 1.2%, to close at 823.69, with 30 of 33 Topix subindexes entering the negative territories.
Major fall came for the resource-sensitive shares as the interest rate increase by China caused a serious dent in gold and crude oil prices. Energy giant Inpex dropped 3.4% to trade at 432,000 yen and Mitsubishi Corp. lost 2.4% to close at 2,000 yen; Sumitomo Metal Mining shed 3.6% to close at 1,335 yen.
Commodity stocks are expected to stay in the negative zone for the coming days due to economic recession after they rallied in the last few days due to a weak dollar and increased investments. Resource stocks, however, are expected to bounce back as monetary easing is expected from the U.S. Federal Reserve in early November.
TDK shares also fell by 2.4% to 4,635 yen despite the positive reports from Nikkei about the company's 570% on-year rise in operating profits.
Nikkei 225 futures for December lost 150 points, or 1.6%, to close at 9380 on the Osaka Securities Exchange.
