TOKYO, July 19 (Reuters) - Japan's Nikkei share average
dropped on Monday to test a major support level from its 200-day
moving average, as semiconductor stocks came under pressure
tracking losses in their U.S. peers due to profit-taking.
Sentiment was also hit by worries about the spread of highly
contagious Delta variant of the coronavirus and the Tokyo 2020
Olympics likely worsening the health crisis and eroding public
support for Prime Minister Yoshide Suga ahead of an election
later this year.
By late afternoon trade, Nikkei share average fell
1.58% to 27,561.59, edging near last week's two-month low of
It was risking a decisive break below its 200-day average,
now at 27,672, for the first time since early last year.
"The 200-day average is an important technical level. A fall
below that could possibly lead to a fall to around 25,500," said
Nobuhiko Kuramochi, senior strategist at Mizuho Securities.
Semi-conductor related stocks were leading the decline after
U.S. tech shares slumped last week, logging four straight days
of losses, with Philadelphia semiconductor shares index
hitting one-month lows.
Taiyo Yuden lost 4.9%, while Sumco fell
4.0%. Tokyo Electron was down 2.2% while Advantest
The broader Topix lost 1.6%, with all of its 33
industry subindexes in the red, in line with shares slipping
globally on rising concerns about a surge in coronavirus cases.
Tokyo Olympics organisers on Sunday reported the first
COVID-19 cases among competitors residing in the athletes'
village, as its population swells ahead of the start of the
pandemic-hit Games next week.
"We could see clusters at Olympics, and then more infections
in Tokyo. That could lead to political instabilities in Japan,"
said Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust
Public support for Suga's cabinet has slid to 35.9%, a Kyodo
poll showed on Sunday, the lowest since he took power last
(Reporting by Hideyuki Sano; Editing by Rashmi Aich)