Japan’s Nikkei share average declined on Tuesday, influenced by a downturn in technology stocks as investors assessed the implications of rising bond yields and ongoing inflation concerns that have cast a shadow over the growth outlook for shares. The Nikkei declined by 0.86% to 64,360.16 as of 0204, whereas the broader Topix experienced a decrease of 0.95% to 4,028.97. “Bond yields are on the rise as markets expect central bank tightening to fend off inflation,” said Koji Toda. “This anxiety weighs on investor sentiment. US technology stocks rose overnight, but they are cautious about whether this momentum will continue.”
The tech-heavy Nasdaq Composite experienced a 1% increase overnight as investors shifted their focus back to the semiconductor sector and various AI-related stocks following last week’s significant selloff, all while anticipating crucial corporate earnings reports. Nasdaq futures recovered from initial declines to remain unchanged during Asian trading hours. US Treasury yields experienced an uptick overnight, with the benchmark 10-year yield rebounding from its most significant weekly decline in seven months.
This shift occurred as apprehensions regarding the effects of elevated interest rates on AI-related equities diminished. In Japan, AI investor SoftBank Group experienced a decline of 6%, positioning it as the most significant detractor on the Nikkei and the index’s poorest performer in terms of percentage change. Fibre optic cable manufacturer Fujikura experienced a decline of 5.49%, while its competitor Furukawa Electric saw a decrease of 4.88%. Chip-testing equipment maker Advantest reversed early losses to increase by 0.32%.
Fast Retailing, the owner of the Uniqlo brand, experienced an increase of 0.65%, serving as the primary contributor to the Nikkei’s performance. Banks experienced a decline, as Mizuho Financial Group decreased by 2.87%, and Mitsubishi UFJ Financial Group saw a reduction of 1.61%. The Topix value index experienced a decline of 1.17%, whereas the growth index saw a decrease of 0.62%. Among the over 1,500 stocks listed on the prime market of the Tokyo Stock Exchange, 76% experienced declines, 20% saw increases, and 2% remained unchanged.
