(MENAFN) Japan’s flagship Nikkei index tumbled more than 3 percent on Tuesday as heavy selling in major technology names combined with escalating worries over Japan–China relations to rattle investors.

The benchmark 225-issue Nikkei Stock Average closed at 48,702.98, sinking 1,620.93 points, or 3.22 percent, from Monday’s finish. It was the steepest percentage decline since April 9, when the index lost 3.93 percent.

The broader Topix also slid, shedding 96.43 points, or 2.88 percent, to end the session at 3,251.10.

Analysts said the market faced significant pressure from a sell-off in heavyweight chip-linked stocks after their U.S. peers fell overnight. Concerns intensified over a potential slowdown in the U.S. economy following comments from Federal Reserve Vice Chair Philip Jefferson, who said Monday he “sees risks to the labor market.”

Tourism-related shares—among them Mitsukoshi Isetan, Takashimaya, Japan Airlines, All Nippon Airways, and Imperial Hotel—extended their declines as investors remained on edge about persistent diplomatic strains between Japan and China.

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