Japan’s Nikkei Falls after Sharp Gains, Treasury Yields Rise Weighs

Reuters

12:35 JST, November 7, 2023

TOKYO, Nov 7 (Reuters) – Japan’s Nikkei share average fell on Tuesday as investors sold stocks to lock in profits after a sharp rally, with an overnight climb in U.S. Treasury yields turning sentiment.

By 0130 GMT, the Nikkei .N225 had fallen 0.82% to 32,441.52. The index closed at more than a one-month high in the previous session after gaining 6.5% in a fourth straight session of gains.

The broader Topix .TOPX was down 0.56% to 2,347.18.

“The Nikkei was losing momentum until last week because investors sold stocks amid rising trend of U.S. Treasury yields. They bought back stocks in the past four sessions, driven by the downward trend of U.S. Treasury yields,” said Takehiko Masuzawa, trading head at Phillip Securities Japan.

U.S. Treasury yields climbed overnight as investors grew cautious about large auctions of notes and bonds in the week that could determine whether there is enough demand for U.S. government debt to push rates lower again. US/

“A pause in declines in the U.S. Treasury yields became a cue for a sell-off for those who wanted to lock in profits,” said Jun Morita, general manager of the research department at Chibagin Asset Management.

Heavyweight chip-making equipment maker Tokyo Electron 8035.T lost 1.19% to drag the Nikkei the most.

Uniqlo brand owner Fast Retailing 9983.T slipped 0.17%.

Ajinomoto 2802.T lost 7.14% to become the worst performer on the Nikkei CHECK even as the food maker raised its annual net profit forecast.

JSR 4185.T fell 1.6% after the chip materials maker slashed its operating profit forecast for the current financial year by 62%.

Hitachi Zosen 7004.T rose 5.59% to become the top performer on the Nikkei after the machinery maker raised its annual profit forecast.