Tokyo stocks open lower on lingering inflation worries

TOKYO: Tokyo stocks opened lower on Wednesday over inflation fears as a recent rise in yields of US Treasury bonds weighed on tech shares.

The benchmark Nikkei 225 index slipped 0.43 percent, or 128.61 points, to 30,027.42 in early trade, while the broader Topix index was down 0.29 percent, or 5.68 points, at 1,932.67.

"Market participants are increasingly speculating that inflation will take place, and higher yields are a negative factor for fast-growing shares such as the IT and high-tech sectors," senior strategist Yoshihiro Ito of Okasan Online Securities said in a commentary.

Expectations that the coronavirus state of emergency may be lifted in parts of Japan, however, is likely to support the market, he added.

Wall Street recouped early losses after Federal Reserve chief Jerome Powell tamped down inflation worries.

US shares had tumbled earlier, but largely recovered by the close after Powell's comments, although the tech-rich Nasdaq closed lower.

Markets have become jittery about the prospects that the pandemic recovery will ignite inflation and lead to rising lending rates, especially in the US economy, where Congress is moving forward on a $1.9 billion stimulus plan.

Powell appeared Tuesday in the first of two days of testimony before Congress -- a twice-yearly event -- and said that while inflation could become "volatile" this year as spending recovers from the pandemic collapse, those price increases are unlikely to be large or persistent.

The dollar fetched 105.29 yen in early Asian trade on Wednesday, against 105.19 yen in New York late Tuesday.

In Tokyo, Toyota was down 0.51 percent at 8,019 yen after the car giant said it will adjust domestic production due to a parts shortage following an earthquake in northern Japan last week.

It said it plans Wednesday to suspend five production lines at four plants, among a total of 28 lines at 14 plants.

Mitsubishi Motors was up 3.07 percent at 302 yen after a report said the carmaker is set to withdraw from Europe.

Toshiba was up 0.57 percent at 3,520 yen after a report said the engineering firm and General Electric are in talks about joint production of offshore wind power facilities.

On Wall Street, the Dow ended up less than 0.1 percent at 31,537.35, and the broad-based S&P finished up 0.1 percent but the tech-rich Nasdaq closed down 0.5 percent.