TOKYO, Aug 25 (Reuters) - Japan’s Nikkei share average dropped sharply in extremely volatile conditions in late afternoon trade, pressured by European investors’ selling as the market is still haunted by fears of a hard-landing in China.
The Nikkei fell 2.9 percent to 18,023.01, having moved in an extremely wide trading range of more than 1,000 points between 18,835.35 and 17,747.50, its lowest level in six months.
Trading volume was huge, with turnover already near 4.0 trillion yen even an hour before closing, compared with the daily average around 2.6 trillion yen.
Volatility remained high. Early in the day, the Nikkei volatility index jumped to as high as 46.24 percent, its highest level in more than two years.
“China is and has always been a risk. This risk has now come to the forefront,” Rie Shigekawa, portfolio manager at Fidelity Worldwide Investment in Japan. “But while downside risks are likely to persist for the time being, the Japanese market is in a consolidation phase rather than a free fall.”
Steelmakers and commodity stocks, which suffered the steepest declines earlier, still underperformed.
JFE Holdings dropped 3.6 percent while trading houses whose earnings are heavily linked to commodity prices fell sharply.
Mitsubishi Corp and Sumitomo Corp were down 4.3 percent and 4.2 percent, respectively.
Although exporters faced selling after the yen strengthened to a seven-month high of 116.15 yen against the dollar on Monday, some firms bounced back after opening lower.
The broader Topix fell 1.5 percent to 1,458.35 and the JPX-Nikkei Index 400 was down 1.9 percent at 13,122.92. (Reporting by Ayai Tomisawa and Joshua Hunt; Editing by Jacqueline Wong)