Japan stocks drop tracking Wall St losses on Powell's dour growth view

SYDNEY, May 14 (Reuters) - Tokyo shares dropped on Thursday,
in line with Wall Street, as the U.S. Federal Reserve chairman's
comments about an extended period of weak economic growth offset
optimism around the early lifting of Japan's coronavirus-driven
state of emergency in some regions.
The benchmark Nikkei average .N225 declined 1.7% to
19,914.78, moving away from a two-month high hit earlier this
week.
Wall Street's three major indexes fell on Wednesday due to
worries about a second wave of COVID-19 infections and Fed Chair
Jerome Powell's subdued view on the recovery of an economy
battered by the coronavirus pandemic. .N
He vowed to use the central bank's power as needed, but also
suggested that might not be enough to avoid deep economic damage
without more fiscal support. E-Mini futures for the S&P 500 ESc1 , which were last
quoted down 0.5% in late Asian trade, dealt another blow to
Tokyo shares.
Further fuelling investor worries, a top World Health
Organization official said the virus may never go away.
On the domestic front, however, Japan is expected to lift a
state of emergency across a large part of the country later on
Thursday, but restrictions on Tokyo will likely remain, pending
a convincing containment of the coronavirus. "The reopening of the economy to some extent is already
priced into the market. That's why we're only down 15%
year-to-date. The real question is whether we can keep this
virus situation under control," said Masa Takeda, portfolio
manager at Sparx Asset Management in Hong Kong.
"Longer term, we really have to reevaluate our investment -
which companies will permanently suffer because of the virus and
which companies are going to thrive."
The broader Topix .TOPX shed 1.9% to 1,446.55, also off
Monday's two-month high, with all but one of the 33 sector
sub-indexes on the Tokyo exchange finishing lower.
Highly cyclical sea transport .ISHIP.T , iron and steel
.ISTEL.T and construction .ICNST.T were the three
worst-performing sector sub-indexes on the main bourse.
Sony Corp 6758.T tumbled 3.9% after the company said its
operating profit will likely drop at least 30% this financial
year through March to the lowest in four years as the novel
coronavirus outbreak damages demand. Yamada Denki Co Ltd 9831.T plunged 6.1% after the home
electronics retailer cancelled its share buyback plans halfway
through, citing a rapid deterioration of business environment
caused by the pandemic. Bucking the overall market's weakness, Takeda Pharmaceutical
Co Ltd 4502.T jumped 4.7% after the company booked a surprise
operating profit and forecast that income would triple this
financial year. Investors also kept a watch on simmering U.S.-China tensions
after U.S. President Donald Trump on Wednesday extended for
another year an executive order barring U.S. companies from
using telecommunications equipment made by firms posing a
national security risk.