At closing bell, the 225-issue Nikkei Stock Average dropped 652.04 points, or 2.82%, to 22,472.91. The broader Topix index of all First Section issues on the Tokyo Stock Exchange declined 35.79 points, or 2.2%, at 1,588.92.
Investors assessed the Federal Reserve's forecast of a long road to recovery for the economy and loose monetary policy. The U.S. Federal Reserve on Wednesday opted to leave its interest rates unchanged and gave a gloomy outlook for the economy, forecasting the world's largest economy could shrink by as much as 6.5 percent this year before expanding by 5% in 2021. Fed Chairman Jerome Powell remarked that the central bank is "not even thinking about raising rates" and that interest rates are likely to remain near zero until the end of 2022. The central bank also said it will at least maintain the current rate of bond purchases.
ECONOMIC NEWS: Japan Large Firms' Business Sentiment Worsens In Q2- Japan's large business firms' sentiment deteriorated sharply in the second quarter, according to business outlook survey conducted by the Cabinet Office and the Ministry of Finance. The index for business conditions among large companies declined to -47.6 in the second quarter from -10.1 in the previous quarter. However, conditions are expected to improve in the next quarter, with the score rising to -6.6 points. The conditions index among large manufacturers plunged to -52.3 from -17.2 a quarter ago. The outlook index for third quarter rose to -7.9. The non-manufacturers index came in at -45.3 versus -6.6 in the preceding period. The outlook index advanced to -6.0. The survey was conducted on May 15 among 10,211 business enterprises.
CURRENCY: The Japanese yen traded at 106.94 per dollar, having strengthened from levels above 109 seen earlier in the trading week.
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