TOKYO: Japan’s Nikkei slumped the most in almost three months on Friday, snapping a five-day winning streak, as financials tumbled after the central bank’s decision to maintain stimulus settings hurt their profit outlook.
Japanese stocks, particularly banking and tech, were already under pressure following a slump on Wall Street overnight.
The Nikkei closed 1.67% lower at 28,143.97 after touching a more-than-six-month high of 28,734.79 in the previous session.
Every sector was down, but financials far outpaced the rest with a 4.4% plunge. Of the index’s 225 components, 206 fell against 15 that rose and four that were flat.
The Topix slumped 1.91% to 2,031.58, retreating from Thursday’s 17-month high of 2,071.60. For the week, though, the Nikkei advanced 0.78% and the Topix was up 0.6%.
Japan’s benchmark 10-year government bond yield dropped to 0.385%, the lowest since Jan. 24, retreating from the Bank of Japan’s (BOJ) 0.5% ceiling under its yield curve control (YCC) policy.
“The drop caused losses to accelerate at banks, insurers and the like,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.
“US equity futures keep extending declines, which is another weight on the Nikkei, but I think 28,000 should hold.” S&P 500 futures were down 0.73%, following the cash index dropping 1.8% overnight mostly due to nerves after SVB Financial Group’s capital raise led to its stock collapsing 60%.
Lender Resona Holdings was the Nikkei’s biggest decliner, sliding 7.47%.
Chiba Bank lost 7.33% and Mitsubishi UFJ Financial Group dropped 6.13%. Seven & i Holdings plunged 5.9% after announcing more supermarket closures and an exit from its apparel business.
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Nippon Yusen fell 6.58%, disappointing with a plan to hike its dividend payout ratio.
Among tech names, startup investor SoftBank Group sank 6.26% and online companies Rakuten Group and Recruit Holdings fell 4.11% and 3.28%, respectively. Printers were standout winners, though.
Dai Nippon Printing jumped 5.4% after announcing a share buyback and peer Toppan surged 6.8%.