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Tokyo stocks fall in morning amid wariness of rising US debt yields
The 225-issue Nikkei Stock Average declined 232.49 points, or 0.79 percent, from Tuesday to 29,200.21. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 12.76 points, or 0.65 percent, at 1,965.10.
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A pedestrian wearing a face mask walks past a stock indicator displaying numbers of Nikkei 225 of the Tokyo Stock Exchange in Tokyo on January 4, 2021, on the first trading day of the year.
(AFP/Behrouz Mehri)
T
okyo stocks fell Wednesday morning as investor cautiousness grew about an uptick in long-term US Treasury yields that dragged down major US stock indexes overnight.
The 225-issue Nikkei Stock Average declined 232.49 points, or 0.79 percent, from Tuesday to 29,200.21. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 12.76 points, or 0.65 percent, at 1,965.10.
The US dollar rose to the upper 110 yen range, its highest level in a year, on expectations of a wider interest rate gap between Japan and the United States. The yield on the benchmark 10-year US Treasury bond briefly rose overnight to its highest level since last January.
At noon, the dollar fetched 110.83-85 yen compared with 110.30-40 yen in New York and 110.22-24 yen in Tokyo at 5 p.m. Tuesday.
The euro was quoted at $1.1704-1708 and 129.74-78 yen against $1.1711-1721 and 129.27-37 yen in New York and $1.1733-1735 and 129.32-36 yen in Tokyo late Tuesday afternoon.
Shares lost ground throughout the morning of the final trading day of the fiscal 2020.
"The weaker yen was a plus for companies such as automakers, but investors worried about further rises in (US) interest rates," said Kenji Abe, chief strategist at Daiwa Securities.
Investors were waiting for US President Joe Biden's speech later in the day about his infrastructure spending plan for possible clues to future movements of interest rates, Abe said.
As details of the plan emerge, such as its size, optimism about a US economic recovery may grow and push interest rates higher, he said.
On the First Section, declining issues outnumbered advancers 1,461 to 666, while 59 ended the morning unchanged. Decliners were led by bank, mining and marine transportation issues.
Mitsubishi UFJ Financial Group dropped 24.20 yen, or 3.9 percent, to 591.30 yen after its brokerage unit said Tuesday it could post a loss of $300 million as a result of its British subsidiary's transactions with a client in the United States.
The announcement followed similar warnings from Japanese brokerage giant Nomura Holdings and Swiss bank Credit Suisse on Monday. US media outlets have reported that U.S. hedge fund Archegos Capital Management triggered turmoil after defaulting last week on margin calls.
Other banks were also lower, with Sumitomo Mitsui Financial Group falling 108 yen, or 2.6 percent, to 4,022 yen and Mizuho Financial Group declining 48.50 yen, or 2.9 percent, to 1,606.50 yen.
Bucking the downward trend, exporters such as automakers were bought on the weaker yen.
Toyota Motor climbed 248 yen, or 3.0 percent, to 8,610 yen and Nissan Motor gained 6.90 yen, or 1.1 percent, to 619.50 yen.
