Nikkei Falls on Sell-Off after Sharp Gains, US Treasury Yields Weigh

Reuters

14:19 JST, November 16, 2023

TOKYO, Nov 16 (Reuters) – Japan’s Nikkei share average traded lower on Thursday as investors sold stocks to lock in profits from the previous session’s sharp gains, with a rebound in U.S. Treasury yields weighing on sentiment.

The Nikkei index was down 0.68% to 33,292.02 by the midday break, after opening down 0.36% and inching up as much as 0.28%.

The Nikkei rose 2.5% in the previous session, topping the 33,000 psychological level for the first time in nearly two months. For the month, the index has risen nearly 8%.

“Investors bought stocks at one point, betting that the Nikkei would continue its momentum and cross its highest closing level scaled this year in July,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Research Institute.

“But that buying did not last long, with rises in U.S. Treasury yields overnight weighing on sentiment.”

U.S. Treasury yields rebounded from two-month lows overnight despite signs of slowing inflation, after a revision of retail sales data showed strong gains in September.

Yields on Japanese government bonds inched up earlier in the session after hitting their month-lows in the previous session.

“Investors wanted to wait and see the direction of the markets as the markets in the U.S. and Japan seemed to have overheated this month, with sharp gains in stocks and sharp declines in government bond yields,” said Ikuo Mitsui, fund manager at Aizawa Securities.

The broader Topix was down 0.36% at 2,364.70.

Chip-related stocks fell, with Advantest slipping 3.65% to become the biggest drag on the Nikkei and Tokyo Electron losing 1.18%.

Heavyweight Recruit Holdings, parent of job-search site Indeed, surged 7.57% after ValueAct Capital Management bought a stake in the company.