(Bloomberg) -- Japanese equities fell, with the Nikkei 225 Stock Average hitting a three-week low as soft US labor data stoked fears of a slowdown in the world’s largest economy. Chip-related shares led the decline, while financials were hurt by lower bond yields.

The Nikkei 225 lost 1.1% to close at 36,657.09, the lowest since Aug. 14. The broader Topix index shed 0.5% to 2,620.76. Both indexes fell below their 25-day moving averages.

“Recent US economic data has been soft so the market is cautious,” said Kentaro Hayashi, senior strategist at Daiwa Securities. “The market will likely remain nervous at least until Friday’s US payrolls data.”

Exporters such as carmakers also slid as the yen traded near a seven-month high touched a month ago.

Bets the Federal Reserve will cut rates later this month boosted Japan’s currency more than 1% overnight. Meanwhile, data showed Japanese workers’ real wages rose for a second consecutive month, fueling speculation the Bank of Japan will be on track for another potential rate hike later this year.

The wage data, however, did render support to domestic demand-oriented stocks including train operators and food companies. As a result, the number of advancing stocks was almost equal to decliners.

Japanese IT services and consulting company Nomura Research Institute Ltd. climbed 3% to a record high after an announcement that it will be added to the Nikkei 225. Mitsubishi Logistics Corp. soared 5.4% as it remained in the Nikkei despite forecasts by some analysts that it would be dropped.

Nippon Steel Corp. shares fell 0.4% after US President Joe Biden was said to be ready to block its $14.1 billion takeover of United States Steel Corp.