The Nikkei share average ended 0.93 per cent lower at 29,018.33, while the broader Topix fell 0.62 per cent to 1,963.57.
The three main Wall Street indexes all fell overnight after the Fed revealed it expected its first post-pandemic interest rate hike to come in 2023, a year sooner, citing an improved health situation amid the vaccine rollout.
“Investors seems to be overreacting to the Fed’s announcement, and the declines in U.S. stocks,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
“But it is understandable, because the U.S. market may fall again tonight as the market might not have fully digested the Fed’s announcement, which was made right before the close.”
Tech start-up investor SoftBank Group, down 1.4 per cent, was the biggest drag on the Nikkei, followed by medical platform service firm M3, which fell 3.61 per cent. Sony Group pressured the Topix by losing 2.34 per cent.
Insurers and banks advanced, with T&D Holdings gaining 3.11 per cent, making it the biggest gainer on the Nikkei. Dai-ichi Life Holdings rose 2.54 per cent.
Mitsubishi UFJ Financial Group added 1.18 per cent and Sumitomo Mitsui Financial Group gained 0.84 per cent.
Toshiba, which is facing corporate governance crisis, added 1.26 per cent after the Wall Street Journal reported its chairman said he may step down after revamping its board and appointing a new CEO.
