Japan's Nikkei slumps as oil, bond yields weigh on sentiment

Business Recorder reported that Japan's Nikkei share gauge dropped sharply on Tuesday as a worldwide jump in bond yields and higher oil prices hurt investor mood. The benchmark Nikkei 225 fell 1.23% to 65,070.58 in early trading, marking its second consecutive daily loss, while the broader Topix lost 1.75% to 4,040.16.

The slide followed overnight losses on US equities, where rising oil prices and Treasury yields fed concerns about inflation and about monetary policy remaining tight. Japanese government bond yields were also hovering close to multi-decade highs, adding to pressure in the domestic market. Meanwhile, US and Iranian officials held separate talks with mediators on Monday in a renewed attempt to bring an end to seven months of conflict that has disrupted energy markets.

Nomura Securities strategist Wataru Akiyama said inflation worries and higher interest rates were weighing on the market, and that AI-related shares, a major driver of Japanese equities, were increasingly seen as relatively expensive. On the Nikkei, 26 stocks advanced while 199 declined. NEXON led the decliners with a 14.57% fall, followed by Idemitsu Kosan at 5.1% and Chubu Electric at 4.46%, while Tokai Carbon gained 3.29%.