Japan's Nikkei hits 2-week low after weak factory output data

Japan's Nikkei share average hit a two-week low on Wednesday, as weak factory output data added to the global economic slowdown concerns, while investors awaited U.S. Federal Reserve Chair Jerome Powell's speech for policy clues.

The Nikkei NI225 fell 0.61% to 27,858.16 by the midday break, hitting its lowest since Nov. 16. The broader Topix TOPIX lost 0.57% to 1,981.59.

Japan's factory output fell for a second consecutive month in October, as stalling global demand and lingering supply bottlenecks put a lid on Japanese manufacturers' production plans.

"Factory output was weaker than expected, and this data came out as concerns about a slowdown in the global economy were looming," said Shigetoshi Kamada, general manager at the research department of Tachibana Securities.

"And, China's PMI was weak as well, which cemented investor worries that the economic situation is worsening."

China's factory activity contracted at a faster pace in November, weighed down by softening global demand and COVID-19 restrictions.

Powell will speak at a Brookings Institution event later in the day about the outlook for the U.S. economy and the labour market. Investors will be looking for clues about when the Fed will slow the pace of its aggressive interest rate hikes.

Investors are also waiting for U.S. labour market data for November and gross domestic product numbers for the third quarter.

In Japan, precision machinery makers (.IPRCS.T) fell 1.77% to become the top losers among the Tokyo Stock Exchange's 33 industry sub-indexes.

Optical glass maker Hoya 7741 slipped 2.65% and contact lens maker Menicon 77780 lost 3.02%.

Fast Retailing 9983, known for its Uniqlo brand, lost 0.63% and was the top drag on the Nikkei.