This Oct. 1, 2020 file photo shows the Tokyo Stock Exchange. (Mainichi)

       TOKYO (Kyodo) -- Tokyo stocks closed lower Thursday as fears grew about a rapid rise in COVID-19 cases a day after the Japanese capital reported over 1,000 new infections for the first time in two months.

       The 225-issue Nikkei Stock Average ended down 329.40 points, or 1.15 percent, from Wednesday at 28,279.09. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 23.55 points, or 1.20 percent, lower at 1,939.61.

       Every industry category lost ground except for iron and steel issues. Major decliners were led by mining, consumer credit, and land transportation issues.

       The U.S. dollar remained weak in the upper 109 yen range after the unit was sold overnight on speculation that a decline in U.S. Treasury yields would narrow the interest rate gap between the United States and Japan, dealers said.

       At 5 p.m., the dollar fetched 109.77-79 yen compared with 109.89-99 yen in New York and 110.50-51 yen in Tokyo at 5 p.m. Wednesday.

       The euro was quoted at $1.1835-1836 and 129.92-96 yen against $1.1832-1842 and 130.09-19 yen in New York and $1.1784-1785 and 130.22-26 yen in Tokyo late Wednesday afternoon.

       The yield on the benchmark 10-year Japanese government bond edged down 0.005 percentage point from Wednesday's close to 0.010 percent, as investors bought the safe-haven debt following a drop in the Nikkei index and overnight gains in the U.S. Treasury market. Bond yields move inversely to prices.

       Stocks lost ground throughout the day after Tokyo logged 1,149 daily coronavirus cases Wednesday, topping 1,000 for the first time since May 13 and exceeding the week-earlier figure for the 25th straight day.

       "The number of reported daily coronavirus cases in Tokyo yesterday shocked the market, as the pace of infections increases at a much faster rate than before," said Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co.

       Investors are starting to become concerned about a potential strain on hospitals ahead of the Tokyo Olympics, to begin next week, amid fears of a rise in the highly contagious Delta variant, he added.

       Meanwhile, market concerns of early U.S. monetary stimulus tapering were eased after Federal Reserve Chairman Jerome Powell said Wednesday that it is "still a ways off" from the conditions that the central bank would start tapering massive bond purchases, brokers said.

       Powell reiterated the Fed's stance in testimony to a House of Representatives committee that rapid inflation was temporary after the U.S. consumer price index for June released Tuesday logged its fastest pace of increase in nearly 13 years.

       On the First Section, declining issues outnumbered advancers 1,839 to 279, while 74 ended unchanged.

       Exporters such as automobile and electronic manufacturers fell after the yen strengthened slightly overnight against the U.S. dollar.

       Mitsubishi Motors fell 6 yen, or 2.0 percent, to 295 yen, Nissan Motor declined 13.4 yen, or 2.3 percent, to 566.8 yen, while Sony Group slumped 200 yen, or 1.7 percent, to 11,405 yen.

       Energy-related shares tumbled on the back of a drop in crude oil futures in New York on Wednesday, with crude oil and natural gas producer Inpex sliding 22 yen, or 2.6 percent, to 819 yen, and Eneos Holdings slipping 4.5 yen, or 0.9 percent, to 472.9 yen.

       Trading volume on the main section fell to 971.17 million shares from Wednesday's 981.18 million shares.

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