Tokyo stocks tumbled Wednesday morning, with the benchmark Nikkei index dropping below the 14,000 line for the first time in five trading days, as broad-based selling set in after sharp falls in U.S. shares overnight.
The 225-issue Nikkei Stock Average lost 279.21 points, or 1.97 percent, from Tuesday to 13,880.88. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 34.58 points, or 2.47 percent, to 1,365.26.
Declines were led by insurance, consumer finance, sea transport and banking issues. The only gainers were mining, oil and coal product, and forestry and fisheries issues.
Tokyo stocks began falling at the start of trading, and losses widened toward the end of the morning. The declines followed those in U.S. shares Tuesday due to rekindling inflationary fears amid a record-breaking surge in crude oil prices, with key crude oil futures in New York briefly rising to the upper half of the $129 level.
Concern about inflation was also sparked by higher-than-expected U.S. April wholesale prices, which the Labor Department released Tuesday, brokers said.
''Stocks are being sold as anxiety over the U.S. economic outlook reemerged,'' said Hiroichi Nishi, the equities chief at Nikko Cordial Securities Inc.
The United States is the largest Japanese export market.
Nishi said the weakness in Tokyo stocks comes amid growing uncertainty over the outlook of the Japanese economy, reinforced by remarks by Bank of Japan Governor Masaaki Shirakawa on Tuesday.
Shirakawa said in a news conference that an economic slowdown in Japan has become ''apparent'' and that it is necessary to look closely at the risk of inflation faced by the global economy as crude oil prices continued to mark record highs.
Selling dragged down recent gainers such as trading house Mitsubishi, which fell 150 yen, or nearly 4 percent, to 3,780 yen.
Brokers said Japanese financials were also hard hit after Oppenheimer & Co. analyst estimates released Tuesday that indicated the U.S. credit crunch could last beyond 2009.
Value leader Mizuho Financial Group plunged 22,000 yen, or over 4 percent, to 519,000 yen and Sumitomo Mitsui Financial Group fell 34,000 yen, or nearly 4 percent, to 825,000 yen. Mitsubishi UFJ Financial Group declined 51 yen, or nearly 5 percent, to 1,004 yen.
Bucking the downward trend, Inpex Holdings surged 40,000 yen, or nearly 3 percent, to 1,430,000 yen, and Idemitsu Kosan advanced 340 yen, or over 3 percent, to 10,550 yen.
On the First Section, declining issues outnumbered advancing ones 1,406 to 226, with 87 others unchanged in the morning.
Trading volume on the main section came to 1,180.50 million shares, up from Tuesday morning's 1,083.48 million.
Volume leader Mitsubishi Heavy Industries dropped 3 yen, or nearly 1 percent, to 492 yen.
The TSE's Second Section index was down 24.17 points, or 0.8 percent, to 2,987.19 on a volume of 23.94 million shares. On the Osaka Securities Exchange, the near-term June Nikkei 225 index futures contract was down 310 points to 13,890.