TOKYO (Reuters) - Japanese shares fell sharply on Friday, bruised on the first trading session of the year as Apple Inc’s earnings warning hit technology stocks and broader sentiment soured on signs of slowdowns in the U.S. and Chinese economies.
The Nikkei share average .N225 was down 3.09 percent at 19,397.01 after losing as much as 3.86 percent, as investors digested bearish news since the start of the year.
Japanese markets opened for the first time in 2019 on Friday after being shut for the new year holidays.
The broader Topix .TOPX shed 2.32 percent to 1,459.49.
“Market instability has extended into the new year, as concerns towards the U.S. and Chinese economies have increased in the wake of weak manufacturing data from these countries,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
“Furthermore, the markets have even begun pricing in the possibility of Fed cutting interest rates. We could see a big reaction if the U.S. non-farm jobs report proves to be weak.”
Wednesday’s China Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) marked the first contraction since May 2017 and Thursday’s Institute for Supply Management (ISM) data showed U.S. factory activity in December suffer the biggest drop since October 2008.
Apple on Wednesday took the rare step of cutting its quarterly sales forecast, blaming slowing iPhone sales in China.
Japanese technology shares tracked their U.S. peers lower. S&P Technology companies .SPLRCT had slid 5.1 percent on Thursday, its biggest one-day percentage drop since August 2011, after Apple’s revenue warning sent shockwaves through the sector.
Exporters retreated following the yen's surge. The Japanese currency was above 110 yen to the dollar a week ago but last traded at 107.58 JPY=.
Companies that derive a large portion of their sales in China also slipped. Industrial machinery maker Komatsu Ltd (6301.T) fell 3.9 percent, robot manufacturer Fanuc Ltd (6954.T) dropped 5.9 percent and cosmetics company Shiseido Co (4911.T) shed 7.1 percent.
Of the Tokyo Stock Exchange’s 33 subsectors, all but two were in the red.
Additional reporting by the Tokyo markets team; Editing by Sam Holmes