Japan's Nikkei falls as higher yields, inflation fears weigh

Business Recorder reported that Tokyo's Nikkei share average declined on Tuesday, with technology names pulling the index down. Investors were weighing higher bond yields and stubborn inflation worries, which made growth stocks look less attractive. By 0204 GMT the Nikkei was 0.86% lower at 64,360.16, while the wider Topix had eased 0.95% to 4,028.97.

Koji Toda, a senior fund manager at Resona Asset Management, said yields were climbing because traders expected central banks to tighten policy to contain inflation. He described the resulting unease as a drag on investor sentiment, and noted that US technology shares had gained overnight but that investors were unsure the rally would hold. Among individual stocks, AI-focused investor SoftBank Group dropped 6% and became the heaviest weight on the index, while Fujikura, a maker of fibre optic cable, slid 5.49%, and Furukawa Electric shed 4.88%.

Market breadth was weak, with 76% of the more than 1,500 stocks on the Tokyo Stock Exchange prime market falling and 20% rising. Fast Retailing, the Uniqlo owner, gained 0.65% and provided the largest lift, while the banks Mizuho Financial Group and Mitsubishi UFJ Financial Group slid 2.87% and 1.61%. Overnight, the tech-heavy Nasdaq Composite rose 1% as chip and AI shares recovered, and US Treasury yields climbed after their steepest weekly fall in seven months.