This file photo shows the Tokyo Stock Exchange. (Mainichi)

       TOKYO (Kyodo) -- Tokyo stocks ended sharply lower Friday after the Bank of England's surprise decision to raise interest rates heightened investor caution about hawkish monetary policy.

       The 225-issue Nikkei Stock Average ended down 520.64 points, or 1.79 percent, from Thursday at 28,545.68. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 28.61 points, or 1.42 percent, lower at 1,984.47.

       Decliners were led by precision instrument, services and metal product issues.

       The U.S. dollar was weak in the mid-113 yen range in Tokyo after the Japanese currency, seen as a safe-haven asset, was bought following a drop in the tech-heavy U.S. Nasdaq index overnight.

       Tokyo stocks lost ground a day after the benchmark Nikkei index rose over 2 percent, as sentiment was hurt by the BOE's decision to increase interest rates to cope with inflation.

       The BOE became the first major central bank to raise interest rates since the spread of the coronavirus. The move followed the decision Wednesday by the U.S. Federal Reserve to end its bond purchases faster than planned, to be followed by three possible interest rate hikes next year.

       "The market expected the somewhat hawkish stance by the U.S. Federal Reserve, but the Bank of England's decision was not foreseen at all. It highlighted how developed economies are shifting toward implementing tighter policies," said Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co.

       In stark contrast, the Bank of Japan decided Friday to keep intact its ultraloose monetary policy, while saying it will trim COVID-19 funding support as financing conditions have been improving among large companies.

       Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Research Institute, said the Japanese central bank's announcement to scale back the support dampened investor sentiment, but it had a limited impact on the market.

       "The decision by the BOJ came at a time when the Japanese government is trying to hand out cash as part of its COVID-19 support. So it may have given investors a negative impression that the BOJ and the government are inconsistent," Sengoku said.

       On the First Section, declining issues outnumbered advancers 1,635 to 451, while 98 ended unchanged.

       Technology issues were weak following overnight losses in U.S. counterparts. Kyocera fell 88 yen, or 1.2 percent, to 7,294 yen, while Fanuc was down 470 yen, or 1.9 percent, at 24,255 yen.

       Air transportation issues fell after additional cases of the Omicron coronavirus variant were reported in Japan. ANA Holdings dropped 20.0 yen, or 0.8 percent, to 2,340.5 yen, while Japan Airlines shed 38 yen, or 1.8 percent, to 2,105 yen.

       Chugai Pharmaceutical dropped 198 yen, or 5.2 percent, to 3,612 yen, after announcing Thursday that it will discontinue its development of an oral drug for COVID-19.

       Volume on the main section fell to 1,440.02 million shares from Thursday's 1,053.52 million shares.

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