Japanese index falls to 4-month low as US bond yields rise

Japan’s Nikkei index fell to its lowest level in four months on Tuesday as sentiment soured on rising U.S. bond yields and the Federal Reserve’s promise of an extended period of tight financial conditions.

The Nikkei widened its losses in the afternoon, falling as low as 31,157.40 points for the first time since June 1, before closing 1.64% lower at 31,237.94 points.

Of the index’s 225 components, 211 fell, 11 rose and three remained unchanged.

The yield on the benchmark 10-year Treasury note hit a new 16-year high above 4.7% after Fed Director Michelle Bowman and Vice President for Supervision Michael Barr reiterated the chorus of higher rates for a longer period in separate events.

Rising long-term U.S. yields helped push the yen to its lowest of the year, near 150 per dollar, but that didn’t help lift shares of Japanese exporters.

Toyota Motor fell 3.05% and Mazda fell 6%.

“Normally, yen weakness would be a reason for stocks to rise, especially export stocks, because it boosts profits overseas,” said Maki Sawada, strategist at Nomura Securities.

“But since the backdrop to the move is a rise in long-term yields, this represents a drag on the Nikkei.”

. In TOKYO the Nikkei index fell by 1.64%, to 31,237 points.

. In HONG KONG the HANG SENG index fell by 2.69% to 17,331 points.

. In SHANGHAI the SSEC index remained closed.

. The CSI300 index, which brings together the largest companies listed in SHANGHAI and SHENZHEN, had no operations.

. In SEOUL the KOSPI index was not opened.

. In TAIWAN the TAIEX index recorded a decline of 0.62%, to 16,454 points.

. IN SINGAPORE the STRAITS TIMES index fell by 0.51% to 3,192 points.

. In SYDNEY the S&P/ASX 200 index fell by 1.28% to 6,943 points.

Source: Terra

Rose

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