TOKYO: Tokyo stocks closed lower on Tuesday, extending US falls as concern grew that the Federal Reserve would stick to its rate-hike plans to combat inflation.
The benchmark Nikkei 225 index fell 1.19 percent, or 341.75 points, to 28,452.75, while the broader Topix index lost 1.06 percent, or 21.15 points, to 1,971.44.
The dollar stood at 137.29 yen, against 137.48 yen on Monday in New York. Shares came under pressure ahead of this week’s symposium of central bankers in Jackson Hole, Wyoming, with investors waiting to see if global monetary policymakers will renew their commitment to interest rate hikes to fight inflation.
There was a “big hit to risk appetite”, with market players apprehensive ahead of a speech by Fed Chair Jerome Powell at the meeting on Friday, said Tapas Strickland of National Australia Bank.
“Hawkish signals from Fed officials recently, as well as hawkish words from the (European Central Bank) about hiking even with growing recession risks in Germany has led to a re-assessment of the markets view on rates,” he said.
Soaring inflation and spiking natural gas prices are stoking fears of winter energy shortages and recession in Europe.
Tokyo stocks close lower on fresh rate hike worries
“Renewed fears of accelerating inflation, partly due to rising natural gas prices, are increasing,” Okasan Online Securities said in a note.
The fresh inflation fears fuelled sell orders in Tokyo trading, made worse “as US long-term (bond) yields rose above three percent”, the brokerage added.
Sony Group dropped 3.31 percent to 11,535 yen, and SoftBank Group lost 2.42 percent to 5,600 yen.
Automakers were among losers, with Toyota closing down 1.98 percent at 2,107.5 yen, Honda down 1.93 percent at 3,651 yen, and Nissan off 1.29 percent at 527.3 yen.
But natural resources-linked shares were higher, with oil developer Inpex ending up 1.95 percent at 1,568 yen and oil distributor Idemitsu Kosan up 1.11 percent at 3,645 yen.
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