Japanese shares trade mostly lower on weak GDP data, surge in JGB yields

Japanese shares mostly declined on Monday as traders weighed softer-than-anticipated domestic growth figures and the fallout from the Middle East crisis. Business Recorder reported that the Nikkei 225 slipped to 68,721.56 in early trading, while the broader Topix fell 0.48% to 4,177.02.

Economic output in the June quarter grew 1.1% on an annualised basis, short of the 2.0% median forecast. Household spending stayed flat and capital outlays fell 1.2%, which raised doubts about domestic demand.

Middle East tensions, including interrupted tanker movements in the Strait of Hormuz, kept oil prices high and pushed Japanese government bond yields to multi-decade peaks. Nomura Securities strategist Wataru Akiyama said the higher rates could cap gains in equities, and he linked the weak GDP figure to inflation and a US slowdown that he said were spilling into Japan.