TOKYO: Japanese stocks rose on Tuesday as a retreat in domestic bond yields from record highs lifted sentiment, although persistent worries about artificial intelligence-linked share valuations capped gains for the tech-heavy Nikkei.
The broader Topix climbed 0.5 percent to end at 3,423.25, putting it not far from the record high of 3,434.60 hit earlier this month.
However, the Nikkei ended flat at 50,412.87, with heavily weighted chip-testing tool maker Advantest offsetting the advance by the majority of shares in the index. Of the Nikkei’s 225 components, 162 rose versus 62 decliners, with one ending flat.
Japanese government bond (JGB) yields declined across maturities as calm returned to the market following a two-day spike to all-time peaks.
Yields have risen as traders positioned for further interest rate hikes after the Bank of Japan raised borrowing costs to a three-decade high on Friday, while also preparing for increased bond supply to fund the new government’s fiscal stimulus.
“The retreat in yields is supporting the overall stock market,” said Maki Sawada, an equities strategist at Nomura Securities.
At the same time, “there are still some worries about AI stock valuations, which is weighing on the Nikkei,” she said. “There’s no particular bad news that’s acting as a trigger - it’s just a pullback after such a substantive rally.”
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