The Nikkei index fell 2.30 percent to close at 32,707.69 points, the largest daily decline since December 20, while the broader Topix index fell 1.54 percent to 2,301.26 points.
On Tuesday, Fitch Ratings downgraded the United States’ credit rating to AA+ from AAA, in a move that angered the White House and surprised investors, despite reaching a solution two months ago to the debt ceiling crisis.
MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 2 percent, on track for its worst daily performance since February.
In Japan, chip maker Tokyo Electron fell 3.12 percent, and chip testing equipment maker Advantest fell 4.48 percent.
Nomura Holdings shares fell 8%, the biggest daily decline since March 2021, despite the largest Japanese brokerage firm recording a jump in first-quarter net profit.
This decline caused the brokerage sector index to decline by about five percent, to be the worst performer among the sub-indices on the Tokyo Stock Exchange.
Bucking the market trend, Toyota Motor Corp rose 2 percent after the company reported that it nearly doubled its first-quarter operating profit.
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