Tokyo tumbles on Nasdaq decline

TOKYO, Japan -- Tokyo stocks tumbled in early trade on Thursday as major technology issues took a beating after a 3 percent slide in the U.S. Nasdaq.

The benchmark Nikkei 225 index slipped more than 200 points in the first 10 minutes of trade and was at 13,811.07, a drop of 256.63 points or almost 2 percent, by mid-morning.

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The broader TOPIX index lost 17.87 points or 1.3 percent to 1,357.36.

The Australian market was also weaker, with the benchmark S&P/ASX200 down 3.4 points to 3423.9.

In Seoul, the Kospi was down 4.93 points to 617.67. Japanese chip-related issues such as Nikon Corp came under pressure after U.S. counterparts dropped on a bearish report on April orders by the U.S. trade group Semiconductor Equipment and Materials International.

Question mark over high tech issues

"High-tech issues lifted the Nikkei in the past weeks on the back of expectations that strength in U.S. stocks and the economy there would be a plus for these issues," said Hiroichi Nishi, general manager of Nikko Securities products group.

"But there is a question mark over that scenario now," he said.

The yen's steep rise against major currencies also weighed on the Tokyo market, pushing shares of exporters lower, including automakers and electronics manufacturers.

Sony is down 2.94 percent to 9,900 yen and Japan's number three auto maker Honda Motor Co Ltd lost 2.67 percent to 5,100.

A stronger yen hurts exporters' overseas earnings when repatriated into the Japanese currency.

Nikon, one of the world's largest markets of steppers that etch circuits onto silicon chips, skidded 3.17 percent to 1,559. But analysts said falls should be limited given the Bank of Japan's ultra-easing credit stance, which pulled the Nikkei up from a 16-year low of 11,433.88 marked in mid-March.

"I think a recent low of 13,694.27 will provide solid support for the Nikkei," Nishi said.

On the earnings front, companies set to unveil results on Thursday include Mitsubishi Tokyo Financial Group, Sumitomo Mitsui Banking Corp, Japan's third-largest telecoms firm Japan Telecom Co Ltd , video game maker Nintendo Co Ltd and steelmaker NKK Corp.

Reuters contributed to this report.

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