Precise Investors

Stocks & Shares

Tokyo stocks slump as U.S. bond yields continue to rise

Tokyo stocks

The Nikkei Stock Average declined 1.97 percent, to 28,359.11, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 1.09 percent, at 1,864.19

Stocks in Tokyo slumped Friday morning amid continued worries about rising U.S. bond yields, after the Federal Reserve did not indicate it would take any solid measures to rein in the rapid rise in interest rates.

The 225-issue Nikkei Stock Average declined 571 points, or 1.97 percent, from Thursday to 28,359.11. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 20.55 points, or 1.09 percent, at 1,864.19.

Real estate, service and nonferrous metal issues led the decliners.

The U.S. dollar stayed firm just below the 108 yen line after breaking the threshold at one point in Oceanian trading earlier in the day for the first time in nearly eight months. A widening interest rate gap between Japan and the United States prompted traders to buy the dollar, dealers said.

At noon, the dollar fetched 107.88-93 yen compared with 107.92-108.02 yen in New York, where the U.S. currency briefly advanced to an eight-month high of 107.98 yen, and 107.15-16 yen in Tokyo at 5 p.m. Thursday.

The euro was quoted at $1.1962-1966 and 129.07-14 yen against $1.1967-1977 and 129.22-32 yen in New York and $1.2052-2053 and 129.14-18 yen in Tokyo late Thursday afternoon.

Shares continued to lose ground throughout the morning after the Nikkei fell more than 2 percent the previous day to finish at a one-month low.

Fed Chair Jerome Powell delivered a speech overnight but fell short of clarifying whether the U.S. central bank would do something to rein in the recent surge in bond yields amid expectations of prolonged monetary easing and higher inflation.

Higher yields increase borrowing costs for companies and also weaken the relative attractiveness of equities.

“The market was weighed down by weak high-tech issues as their U.S. peers shed” after Powell disappointed some investors, said Maki Sawada, a strategist at Nomura Securities Co.’s Investment Content Department.

Leave a Reply