TOKYO: Japan’s Nikkei share average erased early gains to trade lower on Wednesday as investors sold growth stocks on worries about the impact of rising Japanese government bond (JGB) yields.
The Nikkei was down 0.17% at 38,789.52 by the midday break after rising as much as 0.7% to track the strong performance of US chip-related stocks driven by Nvidia’s rise.
The broader Topix fell 0.27% to 2,761.05.
“The market became nervous about rising JGB yields, which is a headwind for heavyweight growth stocks,” Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities said.
“The gains in domestic stocks were eliminated by the rising JGB yields.” Higher yields could hurt growth stocks whose appeal lies in future cash flows.
The Topix’s growth stock index lost 0.49%, while the value shares index inched down 0.07%.
Japan’s 10-year bond yield hit a more than 12-year high of 1.065% earlier in the session amid growing bets that policy tightening by the Bank of Japan is imminent. Chip-making equipment maker Tokyo Electron reversed course to slip 0.11%.
Air-conditioning maker Daikin Industries fell 2.17%.
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Uniqlo-brand owner Fast Retailing lost 0.88%.
Mitsubishi Electric fell 6.33% as the home appliances maker lowered the target for its return on equity to 9% from 10%. Chip-testing equipment maker Advantest rose 2.35% and SoftBank Group gained 3.21%, supported by an overnight 7% gain in shares in Nvidia. An index of US semiconductors rose 1.9%.
The shipping industry fell 1.5% to become the worst performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.
The insurance sector was the top performer, rising 2.36%, with Sompo Holdings jumping 5.45% to become the top percentage gainer on the Nikkei.
Peer T&D Holdings rose 3.85%.
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