Tokyo stocks dropped Wednesday, sending the key Nikkei benchmark over 180 points lower, as trading houses and resource-related shares were hit hard by a sharp overnight drop in New York crude oil futures.
The 225-issue Nikkei Stock Average lost 183.87 points, or 1.32 percent, from Tuesday to 13,709.44. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 19.56 points, or 1.43 percent, to 1,348.69.
A broad range of shares fell, with nonferrous metal, rubber and insurance shares drawing heavy selling in addition to the oil-linked shares.
The Tokyo stock market opened higher, with investors stepping up buying of export-oriented vehicle and electric shares following the U.S. dollar's rebound to the lower 104 yen level and overnight gains on Wall Street.
However, the buying momentum was short-lived. Export-oriented shares reversed earlier gains as the dollar fell back to the 103 yen level in the afternoon, and many other shares also gave up earlier gains.
Brokers said investor sentiment remained weak amid ongoing concerns over the course of the world's largest economy, following the release of the U.S. Conference Board's consumer sentiment reading for May, which slumped to a 15-year low.
Referring to the weak confidence gauge, Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Securities Co., said the situation in the United States looks ''severely bad.''
''Many players are waiting for a slew of upcoming key U.S. data, including jobs data slated for early June, to check the state of the economy,'' he said.
Upcoming U.S. economic indicators include revised gross domestic product data for the first quarter and April personal consumption readings, due out Thursday and Friday, respectively.