TOKYO, July 5 — Tokyo stocks closed lower today in sluggish trade on growing concerns over another wave of coronavirus infections in Japan.

The Nikkei 225 index dropped 0.64 per cent, or 185.09 points, to 28,598.19 while the broader Topix index slipped 0.37 per cent, or 7.32 points, to 1,948.99.

"Negative factors, including rising infections in Japan, fuelled uncertainty among investors,” Yoshihiro Okumura of Chibagin Asset Management told AFP.

The Japanese government is reportedly considering extending virus measures in Tokyo until after the Olympics begin on June 23.

Trading today was largely stagnant, with US financial markets closed for Independence Day.

"Investors are looking for fresh incentives, with the US market taking a break tonight, while the continued spread of Covid-19 weighs on the market,” Okasan Online Securities said.

Local elections were held in Tokyo yesterday, with Prime Minister Yoshihide Suga’s ruling bloc falling short of a majority.

The vote was seen as a key test for his Liberal Democratic Party (LDP) ahead of a national election due later this year.

After the Tokyo poll, "it is difficult to chase the upper side” of the market, Okasan said.

"The Tokyo market lacks the momentum to actively test its upper limit,” Okasan said. "We expect the market to continue to search for a sense of direction.”

The dollar stood at ¥111.02 (RM4.16) in Asian afternoon trade, compared with ¥111.04 on Friday in New York.

SoftBank Group plunged 5.38 per cent to ¥7,391 after China’s cyber watchdog yesterday ordered ride-hailing service Didi to be removed from app stores. SoftBank has invested in Didi.

Mitsubishi Electric dropped 1.83 per cent to ¥1,526 after the Japanese electronics conglomerate said its chief would step down over decades of falsified data.

Uniqlo operator Fast Retailing lost 1.90 per cent to ¥81,500 and Toyota fell 0.48 per cent to ¥9,772. — AFP