TOKYO, Aug 23 (Reuters) - Japanese shares fell on Tuesday, tracking Wall Street losses as investors awaited a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming for cues on interest rate hikes.
Wall Street closed sharply lower on Monday as investors fretted that the Jackson Hole gathering would reinforce a strong commitment by the Fed to stamp out inflation.
"The Japanese market is weak today but relative to an almost 2% fall in the Dow, the Nikkei's decline is smaller. That's because investors have started buying stocks at a dent," said Jun Morita, general manager of the research department at Chibagin Asset Management.
Meanwhile, a PMI survey showed Japan's factory activity growth slowed to a 19-month low in August as output and new order declines deepened, amid growing pressure from persistent rises in raw material and energy costs and weakening global demand.
Technology stocks tracked their U.S. peers lower after Treasury yields rose on concerns about the Fed's tightening policy.
Technology start-up investor SoftBank Group fell 2.6% and was the biggest drag on the Nikkei.
Medial platform services provider M3 slipped 3.3%. Chip-making equipment maker Tokyo Electron fell 0.88%.
Hino Motors, Toyota Motor's truck and bus unit, tanked 5.88% and was the top loser on the Nikkei after its engine-related misconduct widened to small trucks. Toyota slipped 2.16%.
Bucking the trend, leisure-related shares gained after a report said Japan was considering ending its pre-arrival COVID-19 testing for inbound travellers who are already vaccinated.
The airline sector rose 2.41%, with ANA Holdings and Japan Airlines climbing 1.78% and 3.08%, respectively.
Shares of department stores advanced, with Isetan Mitsukoshi Holdings up 0.87% and J.Front Retailing gaining 0.84%.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu)
